ownership, costs, and training

[killbilly]

First off, I gotta say that without this website to help answer some questions, I would have already made some potentially very costly mistakes...I figure I already owe Doug money for saving me from ignornace, in a manner of speaking. That said, I'm looking at some creative alternatives. And Doug, send me an invoice.

It appears that I will be able to start training for PPL within the next 9-10 months (possibly earlier) and I've searched far and wide for the best quality of training for the price. Haven't arrived at any decisions yet, but have some ideas. WhiteAir looks awfully good right now. So does Anson.

Just for grins, I picked up an AeroTrader last night and was browsing through it, deciphering the acronyms, and started wondering...

Does it make sense for a new pilot to invest in a simple aircraft, say, a C-150 or C-152 and hire an instructor to teach him/her to fly it? I was surprised that you can get a very used but serviceable plane, IFR-certified, for under $30K and a pretty wide window before MOH. I've followed the prices off and on, and frankly, they seem to have bottomed out...the same aircraft cost roughly the same amount 7-10 years ago if I'm remembering correctly, so depreciation doesn't seem to be a factor. Or maybe it is. Not sure.

My thinking is that, financially, it might, possibly, be wise to buy the aircraft, lease it back to a flying club or FBO, and pay for an instructor to train in it. Depending on the operating costs (which are hard to find on the web, by the way - maybe my Google-Fu is weak) it seems like the lease-back rate would cover at least a larger part of the loan payment on the plane, assuming the aircraft was financed at all.

Once the student has earned a PPL and IFR certificate, the student could either a) keep the plane and build time in it, b) sell the plane and lose very little of the initial investment, and the freed up cashflow could go toward more advanced ratings (Commercial, CFI tickets, etc.) If the costs/offset are a zero-sum game, this seems workable to me.

I'm not sure this is a smart thing to do - I don't know what I don't know, really, as far as the costs of the aircraft. From what little I've been able to figure out, straight costs on the plane itself (for a 152) would come out to around $60 per hour or so - but the fees for hangar, insurance (a BIG x-factor) and other stuff may blow that right out of the water. I'd have the financial wherewithal for the payment itself...wondering if I could make the plane pay for itself, I guess. Make sense?

I'm guessing at least some of you have investigated this or at least done it...just trying to look at all angles. The basic purchase cost that I've seen would result in a loan payment (72 mos, 8% - according to AOPA) of around $540 a month and change on a 28K loan - I don't know what leaseback rates are, though, and I have zero idea how much insurance would be, as well as hangar/tiedown fees are at some place like KTKI.

Am I on to something here? Is this a smart thing, dumb thing, or just another...thing...one can do in the pursuit of flight training? Interested in experiences, ideas, opinions.

[DE727UPS]

I've got a 152 Aerobat with four new cylinders and a Garmin 430 I'm about to try and sell in the low 30's. You can find good 150's all day long in the 20's.

Very few people buy their own plane to learn in. It's very intimidating, I guess. I think it's a great idea, though. You can burn autogas in 150/152's and an annual is around 1K.

If you lease it back, insurance will be very expensive, you'll have to do 100 hour inspections, and you'll lose some control over how it's operated. Whether it pays for itself depends on the situation. I wouldn't go into it expecting to make any money and be happy if you make a little. The big plus is you'll sell it for what you paid for it and save a good bit on rental costs.

[killbilly]

Originally Posted by DE727UPS

If you lease it back, insurance will be very expensive, you'll have to do 100 hour inspections, and you'll lose some control over how it's operated. Whether it pays for itself depends on the situation. I wouldn't go into it expecting to make any money and be happy if you make a little.

If I'm understanding you right, you're saying that insurance is MORE expensive if I lease it back, even it if was covered under the lessee's insurance company? I'm trying to figure out how that works. Do you know what the average leaseback rate is, and the costs of the 100-hour, etc?

The big plus is you'll sell it for what you paid for it and save a good bit on rental costs.

Yeah, that's what I figured. It's the time spent in there that I'd be concerned about.

[DE727UPS]

I pay about 1K a year for private use insurance. Any time you use a plane for commercial use, it goes up between 3 and 5 times. Yeah, the FBO's fleet policy will probably be way more than what you would pay yourself for private use. 100 hours can be as little as $500 or as much as an annual. Some FBO's will gouge you on 100 hours to keep their maintenance dept busy. At any rate, I would expect you to have to pay more for maintenance because you won't (most likely) be able to "shop around" or do some of the work yourself. If they will let you pull the plates and change the oil, I'd say they aren't the "gouging" kind of place.

[Murdoughnut]

A club/shared ownership is hands down the best way to go. I paid $1300 for my portion of my 172 (a portion which I legally own), pay $100 per month for insurance/tie down and $50 per hour for the plane.

[killbilly]

Originally Posted by Murdoughnut

A club/shared ownership is hands down the best way to go. I paid $1300 for my portion of my 172 (a portion which I legally own), pay $100 per month for insurance/tie down and $50 per hour for the plane.

How many partners do you have in the plane? Are scheduling conflicts ever an issue?

[ElyJs]

I am more of a JC lurker, but I have to chime in on how ownership is going for me. I took my first discovery flight early August. I had always been interested in flying but was now deciding to make a career out of it. I will be graduating from University of Colorado (who just beat TT btw) in December with a business degree. I am someone who vigoursily researches how the best way to go about receiving my training and making my goal of flying for a career. It sounds perfect, decent money, work half the month, you run the show in the cockpit, no 9-5 bs. I was first convinced I was going to take out a loan and head to Ari-ben in florida. I decided first step was go on a discovery flight and find out what this flying thing is all about. I came in very enthusiastically which the instructor saw. It ended up being almost two hours between ground and almost a one hour flight. We did steep turns, stalls and a bunch of other PPL maneuvers until I literally puked.

No matter, I was hooked, flying was it. After digging deep on airplane ownership and looking at how older cessna's actually appreciate, I had found the best way to do it. With help from a friend I had made hanging out at the airport I began researching the 172 I was planning to purchase. My folks are awesome they are very supportive and are lucky enough to be able to help me out financially. My father offered to make the down payment on the loan which I will repay when the plane is sold. I am based out of Boulder and mountain flying is in my future so I decided on getting a 180 hp 0-360. There seemed to be fewer on the market and they demanded quite a premium. I found an old civil air patrol 76' 172 with a lowtime engine and flew it back from Georgia with my instructor as a 5 hour student (man what a blast that trip was).

Now I am 60 hours into my pilot career in less than two months. I go flying 4 or 5 times a week whenever I have time. I go on cross countries whenever I like and stay as long as I want. No one else but me flies my plane. I am actually planning to fly back to the east coast to see family here in the upcoming month. My PPL cost me about 2 grand for instruction given plus the variable costs on my plane (which run about 30-35/hr). Now I am flying friends up and down the front range.

I wait tables here in Boulder and have been able to just barely break even at the end of the month. I may not have the cash to go out as much as I would like but I get to fly all of the time. I decided not to put my plane online because my insurance would jump from around $1300 all the way up to $8000 plus 100 hours which also cost quite a bit.( which are the same as an annual execept they can be conducted by a mechanic without his IA 2. an annual counts as a 100 hour but not vice versa...I think that was the difference anyway) Also you gotta figure instead of selling a mid time engine you will be likely be selling a high time or shelling out the money for a rebuild. I fly the plane enough that my fixed costs become very small. I plan to put the plane up for sale when I reach my 250 hours and if all goes well make a little on the transaction.

If you are planning on getting all of your rating quickly, have a little money saved, and are willing to do a little more work airplane ownership seems a great way to go. No matter what happens, whether I decide to pursue an airline career job or not, I will always own a plane. In fact I am already saving and searching for my future RV-4. If all goes as planned (as it has so far) I will be earning my ratings for a fraction of the costof Ari-ben without having to relocate and keep my fairly well-paying job. It has been one of the most rewarding purchases I have ever made (also the largest, the loan payment looms from the 20th on, every month). The amount you will learn, from maintenance, to intimately knowing every feature on the plane will be irreplacable. Flying won't seem as much about spending money as it will be about fun. I actually have developed this crazy picture about whether or not I want to fly that day, the more I fly the cheaper it is! Sorry if this post was a little all over the place...Send a pm with any specific questions or advice desired on the process
-Jason

[Adam2006]

ElyJs, does the $1300 for insurance cover your instructor too, if not, what would be the additional cost? Thanks

[Murdoughnut]

Originally Posted by killbilly

How many partners do you have in the plane? Are scheduling conflicts ever an issue?

There's 13 of us I believe - I just recently joined. Fortunately, most of the guys are retired so they fly during the week. Those of us who work usually take it up on weekends. Everyone I've talked to said there really aren't a lot scheduling issues. Just yesterday I checked the availability for next Saturday to fly to Cedar Key for their seafood festival and the plane was available all weekend.

Took me forever to find a good club/partial ownership opportunity, though.

[ElyJs]

I have an open pilot policy. I am insured and any pilot with over 500 hours is also covered.

[killbilly]

So it seems that owning (at least part of, anyway) an aircraft is a potentially good idea in the long term for saving money - that's the impression I'm getting.

Also thinking - just off the top of my head - that it would be interesting to buy a plane from a CFI and work the cost of the instruction into the purchase price of the deal. Then, you're making two payments a month, basically (plane payment and insurance payment) plus whatever operating costs. At the end, you have your PPL and maybe instrument.

Are there any specific resources for finding shared-ownership options, any kind of marketplace for that? Or do ya just have to hunt around?

And as a follow-up question - are there any flying clubs in DF/W besides the North Texas Flying Club - they're the only ones I've been able to find, but I'd like to compare.

[DE727UPS]

"buy a plane from a CFI and work the cost of the instruction into the purchase price of the deal"

Wanna move to Spokane? It would be rare to find someone near you with a plane for sale but if you could do it, you're concept sounds great. A downside would be a 150 would be good for the PPL and some of the Comm/IFR but it's not gonna get you from zero to hero.

"Are there any specific resources for finding shared-ownership options"

Not that I've heard of. If you're in Dallas area, you should just buy a 150 and put an add in the paper/craigslist looking for partners and a CFI. Find a CFI that will freelance with you and then use the plane to freelance yourself when you get your ratings.

[Kloader]

Hi. Good question and here is my experience with such a plan. I am an A&P/IA and recently squeeked out my CFI while using my own IFR C150. It seemed like a good idea at the start.....and maybe, all said and done I came out a few pennies ahead. But by no means was it a slam dunk $$$ wise.

In retrospect I would have joined a flying club so that I would have had a broader selection of planes (i.e. really solid IFR platform and complex) and had the maintenance worries fall on someone else's shoulders. With ownership you are really throwing the dice that you will not have a serious maintenance issue. You might....you might not. But if you lunch a cylinder and you are not an A&P, your looking at a grand to get it fixed....plus your down time....plus your worry.....etc. The FBO's 172 at $100/hr starts looking pretty good. I fly it...I land it....I leave it. Done.

A competitive FBO that is renting C150's around $60/hr is breaking even. That is essentially your cost as well. That FBO only makes a profit because they might own the fuel concession.

The upshot to ownership, and the main reason I have kept my 150, is that if I need practice.....just like practicing the piano, I go out and practice. I can take all day to work on chandelles or what not and, at that moment, only really consider the cost of fuel. That contradicts what I said earlier, but that's how it works out for me. I think I am still recovering from a bad $400 IFR practice day in a 172SP while we tried and tried again to get my head around the ADF.

Well, I've started rambling. I look forward to seeing your decision. Neal

[killbilly]

Originally Posted by DE727UPS

"buy a plane from a CFI and work the cost of the instruction into the purchase price of the deal"

Wanna move to Spokane? It would be rare to find someone near you with a plane for sale but if you could do it, you're concept sounds great. A downside would be a 150 would be good for the PPL and some of the Comm/IFR but it's not gonna get you from zero to hero.

Hah! I know what you're thinking, because I thought the same thing this weekend. I'd even POSSIBLY have a job lined up there, as well, though I doubt it would pay what I need it to. <sigh> It's just not practical right now.

Not that I've heard of. If you're in Dallas area, you should just buy a 150 and put an add in the paper/craigslist looking for partners and a CFI. Find a CFI that will freelance with you and then use the plane to freelance yourself when you get your ratings.

[/quote]

Well, like in the original post, I'm a few months away from doing something like that (still don't know if my company is moving me to Florida or not - may know more about that in two weeks, but it WOULD unleash me from this stupid house,) but it's definitely a thought. I guess I'd almost like to have a partner(s) lined up before I did it, though.

Food for thought, man, food for thought.

[DE727UPS]

"I think I am still recovering from a bad $400 IFR practice day in a 172SP while we tried and tried again to get my head around the ADF"

I would NEVER take a guy up in an airplane to do holds or ADF until he had it very down in a ground trainer. Ground trainers are really good for those two things and cost a fraction of what an airplane does.

[Murdoughnut]

Originally Posted by killbilly

Well, like in the original post, I'm a few months away from doing something like that (still don't know if my company is moving me to Florida or not - may know more about that in two weeks, but it WOULD unleash me from this stupid house,) but it's definitely a thought. I guess I'd almost like to have a partner(s) lined up before I did it, though.

Where in Florida might they be moving you?

[killbilly]

SRQ area. My company is based there. Temporarily, I'd live in southeast SRQ (rent free w/ Dad) for a while, and depending on what the GF wanted to do/jobs she could find, move somewhere between TPA and SRQ - probably in either North Bradenton or St. Pete. That area.

[fly22]

I own, actually one of my LLC's owns a 152 Sparrow Hawk. Although its a little slow and boring it was one of the best invesments I made. I have flown it a ton even from KSLC to CHicago. If you are not scared of a little risk then I would say do it. I don't instruct out of it but I fly for several large cattle ranchers and hunting outfitters. I make more doing that then I ever would cfing out of it.

The costs aren't that bad on a 152 and most of them are business expenses.

[B767Driver]

Budget a lot for maintenance. Don't skimp in this area during your financial planning.

[Murdoughnut]

Originally Posted by killbilly

SRQ area. My company is based there. Temporarily, I'd live in southeast SRQ (rent free w/ Dad) for a while, and depending on what the GF wanted to do/jobs she could find, move somewhere between TPA and SRQ - probably in either North Bradenton or St. Pete. That area.

I live in St. Pete and my club is out of KPIE. If you do move to the bay area, check it out ... www.pinellaspilots.org