Important: This article isn’t meant to be accounting or tax advice, nor should the calculations and methodology be used without consulting a professional in these areas. Use this article for information purposes only and don’t use it for anything practical.
Here’s a typical noob thought-process:
If I rent a camera it’s going to cost me X. Since I’m shooting Y days and the rental price is Z, the total is almost X. So, why not buy the camera instead?
I made that mistake with my first camera, but won’t do it again. Why not? Here are some reasons:
- A rental camera comes with accessories, not just the camera.
- If something bad happens, the rental company should be able to supply you with a replacement.
- If you feel the camera isn’t good for certain days, you can rent another camera or gear for those days.
- After the shoot, you no longer have to take care of the camera or try to rent it out (Which is not a stress-free activity, I assure you).
It’s the same as buying a cheap printer but forgetting to factor in the costs of ink, clogs and paper. This article looks at some of the factors that can help you asses whether to buy or rent a camera. We’ll look at three things:
- Should you buy or rent a camera?
- If you’re buying, then how much should your camera earn?
- If you’re working for X days a year, how much can you afford to spend on a camera?
Your camera’s place in your business
The typical price points of camera gear are as follows:
- Canon 70D: $ 1,200
- Canon 5D Mark III: $ 3,500
- Canon C100: $ 5,500
- Canon C300: $16,000
- Canon C500: $26,000
I’ve selected Canon because the prices are easier to compare directly. You can replace them with whatever you like.
Now, you can use expensive Canon Cine lenses on all of the above cameras. However, you’re more likely to use the cine lenses with the C300 and C500. On the 5D Mark III and C100, you’ll probably try to get a few L series lenses. On the 70D, you might look for bargains in used lenses or third-party manufacturers. In every scenario, you have a total budget, which decides what you can afford.
I have written a few articles on getting your cameras up to speed, which you should read:
- Comprehensive Guide to Rigging ANY Camera
- Canon C300, pricing a kit
- Canon C500, pricing a kit
- Which lens to get?
All said and done, what I’ve come to realize is that the camera shouldn’t be more than 1/3rd the total budget. Don’t forget, the total price includes not just the lenses, media cards, batteries, etc., but also the rigs, filters, tripod, sliders, bags, and so on. A good ballpark is somewhere between 1/4th and 1/3rd your total budget. Actually, the lower the better!
Here are the rules of thumb:
- Cost of lenses should be a least equal to the price of the camera body.
- Cost of camera body should be 25-33% of your total budget.
Important! I’m assuming you are a working professional, and you’re actually planning on making a living with your gear. If you’re not aiming for that, this article isn’t for you.
Buy or rent a camera
Here’s a rough estimate on how much a camera body costs per day, depending on how many days you’re renting it (price in USD):
The first column is the day rate. The second is the total for the days rented.
You can start from a day to a few months. I’ve extrapolated the rates to a year and even two years! No one gives cameras out for that long.
How do rental rates work? Let’s take an example. E.g., if you rent a camera for 90 days, the rental company makes $900. If it rents the camera out for 3 days each instead, it can make $ 1,050 – but that’s not a big difference. If it were, they wouldn’t give it out for long periods at all! Now, if you apply the same formula to 365 days or 730 days, you’ll see that the rental company actually loses money.
Therefore, it is safe to assume that the 90 day mark is probably the best day rate you’re going to get. That’s what we’re after, really.
Let’s take a two year period (the life of a camera nowadays) in which your camera will be used to its full potential for maximizing your revenue. If you’re lucky, the camera will work well past the two-year mark, but that is gravy. If you’re renting for this period, the rate is:
|Day rate||Total||Market Price|
The first column is the day rate and the second is the total for two years, if rented for that long.
It doesn’t take a scientist to know that buying is definitely cheaper. The question is, what is the tipping point – the point after which buying makes sense? There are a few hidden benefits to purchasing your own gear:
- You can write it off in taxes in certain countries.
- You can sell it later to recover 1/3rd or more of its price.
- You can rent it out on quiet days to earn some money.
Let’s take the worse case scenario where the best you can do is recover one-fourth of the price after two years (something ‘cooler’ came out, or it’s not in A+ condition, whatever):
|Days||Price||Sale||What you’ve spent||Days @ rental rate||Days / month|
The column ‘What you’ve spent’ is what the camera body is actually costing you. If you have tax benefits please include them (it makes a big difference)! I’m not considering the following, but you should:
- Currency rate
- Price rises
In any case, you’ll be left with an amount that you then divide by the lowest rental rate you’re going to get. What’s left is the total number of days per month your camera should be put to use to justify buying it.
In our case, you can see that the amount is pretty close to 10 days a month on average. It’s not a magic number. After all, I’ve used the same formula, and have multiplied and divided by the same factors!
Don’t make the mistake of only adding your camera body. You should also add items that last longer than the camera body (lenses, tripods, etc.) and also those that don’t (media cards, expendables, filters, etc.). You should also look at the actual rental rates in your area for full kits (the more the items in the kit the better the deal tends to get). Include only those items that you’re thinking of buying. Let me explain with an example.
You need five things for your shoot: A, B, C, D and E. You already own D and E. You’re thinking of buying A, B and C.
The rental company is giving you a good deal on A+B+C+D+E+F. The rate is R. You don’t need F, it’s just going to lie in the bag it came in. You also don’t need D and E because you already have it. The question is, how do you know that if you buy A+B+C it will be better than renting R?
Sometimes, the ‘sweet deal’ is sweet, but there’s no free lunch you know. From R, you need to find out how much A+B+C is worth. To do that, you’ll need to find the market prices of A, B, C, D, E and F. Not so hard. That’s part of the exercise anyway!
Now, add A+B+C+D+E+F and you’ll get M, the total market price. Divide A by M, B by M, C by M, and so on. Each resulting value – a, b, c, d, e and f is the percentage value of each item in the kit.
To find the value of A, multiply a with R = aR. Same for B (bR) and C (cR). Add them up (a+b+c)*R and that is the value of just the three things you need.
Now compare them with the market rates of A+B+C, and use the method I’ve given above, just as you would for one camera. Here’s an example in a table:
|Market Price||What you care about||%||Rental Rate (R)||% of rental rate||What you care about|
|Media Card (C)||25||0.8%||200||1.63|
|Tripod (D)||590||Don’t care||19.3%||200||38.56||Don’t care|
|Teddy Bear (F)||10||0.3%||200||0.65|
The cost of three items that you care about is $2,225. The rental price is $200 per day, but the three items you care about are only $145.42 of that. If you’re renting for 30 days, you’ll be paying $4,362.6, so buying seems certainly cheaper in this case.
All said and done, what you’re looking for is the magic number – how many days per month can you charge for your kit for it to worth buying over renting? You are planning to charge for it, right? If you don’t, it’s always a loss! In the last example, the total number of days you should be charging your gear for (after deducting 1/4th for selling it) = 12 days. That’s why it is a no brainer.
However, in the real-world example of our Canons, you should be working 10 days a month for two years (120 days a year) for it to be worth buying. If you charge as per the ‘industry norm’ in your area, your gear will break even in two years. If you work more than the magic number (say 15 days a month), then your gear is earning for you by just being there.
You might be wondering: But why should I only charge the lowest rental rate for my own gear? Why not more? You should charge more! That’s what we’ll cover in Part Two.