The closest answer I can give you is: it depends…on A LOT of factors. I’ll go over some of the biggies below. I can give you some national averages, though.
It takes approximately $30-50,000 to fill a gym with about 3-4,000 sq ft and about $10,000 for a smaller studio or gym with roughly 1,500 sq ft. Now, depending on how many big machines vs. smaller items you want, more versatile things like bands, dumbbells, and benches, you would be looking at an average of $60-100 a month…PER ITEM.
The bigger the gym space, the more needed equipment, and the higher the monthly lease charges. Now, let’s discuss those factors.
Type of Equipment
The monthly average of $60-100 per item is typical for bigger equipment such as treadmills, ellipticals, and stationary and recumbent bikes. These are the main staples for a gym. Whether your clients are novices or pro athletes, almost everyone hits cardio in some fashion.
Most leasing companies split their available equipment into 3 main categories: Cardio, Strength, and Accessories. You can lease everything from dumbbells to treadmills and mats if necessary.
The most popular equipment leased includes:
- Bikes- Recumbent and Stationary
- Rowing Machines
- Free Weights
- Benches, Bars, Racks
- Battle Ropes and other Specialized equipment
Cost of Equipment
Just like any other purchase, the lease cost depends on how much the product is in the first place. For example, I did a search for machines at various leasing companies.
- Treadmill prices ranged from $2,999 all the way up to $14,000.
- Bench options ranged from $250-600 each.
- Row machines ranged anywhere from $1,200 to $2,800.
- Multi-Gym machines with cable pulling options ran around $17,000!
So, unless you have the money upfront to pay for just one of each of these, leasing is a very viable option.
Buying in Bulk
It also helps to lease in bulk. If your gym space is smaller, you may only be able to fit 2 or 3 big machines, a weight rack, and have more “mobile” type equipment. Benches, free weights, bands, ropes, and plyo boxes can be moved around the gym for users, and the price is lower. You might save money leasing these items in bulk.
Three key components factor into the monthly lease agreement: term length, the locked-in interest rate, and the type of agreement. Most term lengths range from 12- 60 months. Interest rates aren’t locked in until you sign a contract, but they make a big impact on the monthly payments. Use this handy calculator to help you understand different term lengths.
Some leases let you buy out the equipment once you pay the lease off, or they give you a discount to renew the lease. Other options cover maintenance and replacement within the agreement. Just make sure you read the fine print first.
Credit Score and Budget
Your credit score plays a big part in how much a leasing company or a bank will allow you to finance. The average qualifying credit score is 620-640 at a minimum. The higher the score, the better financing you can get. This affects the term and interest rate offered to you as well.
Your budget is what you can afford to shell out monthly for the lease of all your equipment. The best advice ever given to me on any large purchase in life is this:
Make a list of everything you need to put money towards for your business. Rent for the building, monthly utilities, and payroll, to name the big ones. Then make a list of income-bearing items like gym memberships and any add-ons like personal training sessions your clients will pay for.
Figure out your projected expenses, so you know what you are comfortable paying monthly for each leased machine. You also need to know how much you can spend and still make a profit to keep your gym a success. This is called your break-even point.
Pros and Cons of Leasing Gym Equipment
Some of the numbers above might be bigger than some people are ready to see, so let me put it a little more into perspective for you. Leasing has its good and bad points, but ultimately the deciding factor comes down to upfront costs.
Pros for Leasing
The biggest item in the pro column is the lower upfront costs. Instead of shelling out the $30-50,000 in one shot, you can lease for a monthly payment. This keeps your head above water more since you will have money coming in monthly to help offset the monthly costs.
Another big pro item is maintenance… if you choose the right contract. While you are essentially renting this equipment, the leasing company wants to ensure the longevity of its products. They will typically cover any regular maintenance and damages from the usual wear and tear.
Taxes. Yes, leasing can be a tax break for the business. Since you don’t own the equipment, you don’t have to count them as business assets. PLUS, you can usually write the monthly payments off as a business expense. WIN WIN!
Cons for Leasing
Really, you can put the ownership question on both lists. Since you don’t own it, you aren’t wholly responsible, but BECAUSE you don’t own it, you can’t always choose the brand of product or the condition of what you lease. Sometimes companies only offer used equipment. Others provide new but only select brands and models.
That cost you are saving by not having to pay in full, you may be paying in interest rates and financing. Because you are leasing, you have a monthly payment. Some of those companies will include amount for maintenance and depreciation while in use. Do the math before signing a lease agreement; you may find buying outright is cheaper in the long run.
Overall, the cost of leasing gym equipment comes down to the size of your gym, how much equipment you need, and how much your budget allows for added monthly expenses.