Pitfalls of Buying a Video Surveillance Trailer for Passive Income
Video surveillance trailers can be seriously expensive at up to $150,000 per trailer plus insurance costs. It can be very difficult to source video surveillance trailers as there aren’t many distributors and maintenance requires subject matter expertise in off-grid power systems and advanced networking.
Video surveillance trailers are small trailers with surveillance cameras that are designed to monitor construction sites, public events, parking lots, and off-grid areas.
They feature high-capacity batteries and solar panels that help them provide persistent monitoring with no mains power.
You can buy an autonomous surveillance trailer to provide video monitoring services for a specific time and generate passive income by renting it to businesses.
The charges can differ depending on the location and duration. However, just like other businesses, there are some pitfalls for buying this monitoring system.
The Pitfalls
1. They are expensive
Video surveillance trailers are expensive. This is the main reason why most businesses prefer to rent them rather than buy. This barrier to entry is what creates the market for renting these units.
It’s the same reason many construction companies don’t own all their heavy equipment but rent it instead.
As an investor, you may need multiple video surveillance trailers to generate the income you need. The typical price to purchase ranges from $30,000-$150,000 dollars per trailer.
This does not include the repairs or business permits required in your location. In addition, the replacement parts can be expensive. Therefore, you should look for high-quality parts to avoid frequent replacements.
2. Competitive market
Getting your first customers can be difficult. This is because the existing companies have managed to establish a strong base and some are financially-backed.
For this reason, you need to market to and educate potential clients on the benefits of including monitored video surveillance into their budgets.
Start prospecting by looking for temporary events and construction sites that take more than 6-8 months to complete. Most companies will have budget for renting video surveillance trailers if the event or construction project will take more than six months.
The price of renting for more than six months can be equivalent to the cost of acquiring a new surveillance trailer. So, you can break even on your investment in a relatively short period of time.
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The reason most businesses still choose to rent these units rather than buy is because the units still require a level of subject mater expertise to maintain and operate.
Additionally, there’re logistical, tax, and insurance-related reasons companies decide not to buy. This creates a great opportunity for entrepreneurs to deliver a high-quality service using these surveillance trailers.
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3. Unreasonable Financing Terms
If you have a high credit score, lenders will offer to finance surveillance trailers.
Nevertheless, some of the terms make it difficult for investors to a return on investment quickly.
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For instance, high interest and service fees will minimize cash flow and delay the break-even point they need to hit in order to achieve max profitability.
If you choose to finance, ensure you negotiate terms to get better deals. It helps to work with lenders who understand this space, because they need to understand that this equipment directly translates to cash flow.
4. You will need Insurance
The price of a security trailer is equal to the average car.
As a result, you will need Insurance to cover and protect your investment from unprecedented accidents. The insurance company charges a fixed fee per month.
Typical insurance policies for surveillance trailers cost about the same as a motorcycle’s policy.
5. Repair and Maintenance requires subject matter experts
The system encompasses electrical components that may require a wide variety of expertise—for example:
- Advanced networking
- Operating System Administration
- Security camera configuration and operation,
- Cellular configuration
- Solar power systems
- Advanced electrical knowledge
So, you have to hire different subject matter experts for repair and Maintenance.
When the trailer experiences mechanical problems, you might have to hire a mechanic. Conversely, if the surveillance components run into problems, you’d need to call an IT expert. In some rare cases, you may require an engineer from the manufacturing company to repair sophisticated parts.
6. Difficult to Source from distributors
Sourcing a trailer can be frustrating if you don’t have reliable suppliers.
Also, shipping can take ages in some locations. If you want to have the best experience, look for a reliable supplier and one that offers after-sales support.
When you’re in the business of renting surveillance trailers, you will not win new contracts by telling leads they have to wait 2 months to receive their trailer.
You need to be able to balance a reasonable lead time with the cost of carrying inventory that’s not in the field generating revenue.
In other words, you need a distribution partner that can put a surveillance trailer onsite with your customer fast.
Final Thoughts
Buying a surveillance trailer for passive income can be profitable.
But there are a few challenges to expect. Once you maneuver these challenges, you will enjoy a smooth passive income with very few service calls and headaches that are common in old school security service offerings.
