Buying a plane vs renting from FBO? Worth it?

[ZUKO]

I kind of got to thinking today that it could be a viable option to purchase an inexpensive plane to get all my ratings in and then sell. Saving pretty good money on the rental rates.

My question for you guys... Would you suggest this route? I am sure there are a lot extra expenses on top of the cost. Insurance, mx, hanger space etc.

I am still pretty young with no debt and 10k in savings/investments. I started looking online out of curiosity and it seems like I could get a cheap cessna for 25-30k. The ideal situation would be to earn my IR,Comm,CFIs in the plane and then sell it.

Not sure if it would be worth the hassle at such a young age with out anyone to really guide me except for text resources.

[DE727UPS]

We've talked about this before. Do a search. It's a good idea.

[Doug Taylor]

Originally Posted by ZUKO

Not sure if it would be worth the hassle at such a young age with out anyone to really guide me except for text resources.

Here's a main site article: clicky

[MSUDAWG]

Exactly as they said, do a search....But speaking from experience about owning your own airplane as opposed to renting as I used to do, owning is worth it 100fold. The airplane is at your disposal and you dont have to work around a busy flight schools schedule.

For my dad and I, they insured the airplane on the lowest time pilot who will be flying it which was me, no matter how much time my dad has. Our insurance on a 172 for a year is around $900-$1000....Hangar is about 200per month (but you can get a tie down at most airports for about 30-50 per month).

We charge ourselves about 10 dollars per hour I believe it is for an engine overhaul. Because when it comes time to overhaul the engine, usually at about 2000hours on the engine $20,000 is a lot of money to cough up at once so we just deposit money in an account every month. MX for the most part is the annual which will run about 800 bucks, i believe I dont remember the exact number. You will save a lot of money if you do the preventative mx yourself, ie: oil changes. Basically the more you do on your own to keep the plane up and looking nice and running nice, the less you have to rely on paying someone else to take care of. It is a rather large investment and it does cost money to leave the thing parked, but it is worth it. You will get your money back when you sell because these things appreciate at a pretty good rate.

Like doug said, check out the link because he spent a lot of time doing a good write up on this exact topic on the main page. Good luck!

[frog_flyer]

Originally Posted by Doug Taylor

Here's a main site article: clicky

I call it the 'mainline.'

Stay strong on the scope!!1

[Mr.Maximus]

FWIW - Buying worked out well for me. I bought a Cherokee 180 for 30K, put 500 hours on it and sold it for 35k,

I had it for two years with the following costs:

2 yrs ins. 1600
2 yrs. annuals 1500
2 yrs mx 1500
2 yrs hanger 4200

Cost for the above 8800

Minus money made on selling a/c -5000

Total Cash out of pocket 3800 divided by 500 hours

Cost per DRY hour 7.60/hr

Your mileage may vary - but under 8 bucks an hour can't be beat.

[DE727UPS]

I can't believe more newbies don't go this route. Maybe it's cause there isn't an "on site interview" attached to the deal...

[MSUDAWG]

Originally Posted by DE727UPS

I can't believe more newbies don't go this route. Maybe it's cause there isn't an "on site interview" attached to the deal...

Or a guaranteed FO job/Interview after paying 6000 buckos for the RJ course...

[jrh]

Originally Posted by DE727UPS

I can't believe more newbies don't go this route. Maybe it's cause there isn't an "on site interview" attached to the deal...

Actually, I thought about going this route and decided against it for a few reasons.

The biggest one is that there are no guarantees in these numbers--mainly the maintenance costs and resale value. Sure, most annuals are about $800, but sometimes something big goes down and it'll take $2000-$3000 to get it up and running properly. I know a guy who bought a Dakota (PA28-235) and dropped $8k on his first annual. It's gambling to say every annual will be $1,000 or less. How much risk are you willing to take? That's the question every person has to decide for themselves.

The same can be said for resale value. Some people make $5k on the resale. Some people break even. Some people lose $5k. There are so many factors involved, nobody can predict exactly what a plane will resell for. You might make a killing, but don't count on it with any certainty.

The secondary reason I like renting planes is because no single plane can fit every "mission profile" for what I want to do with flying. Sometimes I want to go low and slow. Sometimes I want to carry a big load. Sometimes I want to get somewhere as fast as possible. Sometimes all I need is bare-bones VFR equipment. Sometimes I need to get somewhere that's low IFR. In order to fit all those profiles I would need at least 3 or 4 different types of planes. I can't afford to own 3 or 4 planes, but I can afford to get checked out in and rent 3 or 4 different types.

Along this same line of thought, there are people who argue an owner aircraft is more available to the owner. Compared to extremely busy flight schools, that's probably true. However, there's power in numbers. My old flight school owned four 152s and a 172. If I went out to fly and had a maintenance problem, I'd squawk it and grab a different plane. Had I owned my own plane, I'd have to send it to the shop and sit around for a few days until it got fixed.

If you're looking at a plane for strictly training, you can get by with an IFR equipped C-152 or Warrior for most flying--Private, Instrument, single-engine commercial add-on, and Flight Instructor single-engine add-on. However, you'll still need a twin for at least 20-30 hours for the initial commercial and CFI tickets. Again, there's no magical plane that can do it all.

The last point I'd like to make is simply a matter of tying money up for a couple years. Suppose you have $30k sitting around that you don't know what to do with (wouldn't it be nice!). Let's say you drop $30k into an investment making 10% interest for two years. That's a little more than $6k you'll make in interest. If you put $30k into a plane for two years, that's $6k in interest that you're losing--maybe you'll make it back on the resale, maybe not. If you rent, you can "pay as you go" and let your initial capital ($30k) make as much interest as possible, for as long as possible, by sitting in your investment until the time comes to spend it on flying.

To sum it up, it all comes down to risk vs. reward. It might pay off big time, or you might lose some money when it's all said and done.

Take this advice from a guy who dropped about $36k into all his training, zero time to MEI. I rented the entire time and have no regrets. The FBOs and flight schools I went to assumed all the risk. All I had to do was show up and fly. It was nice.

[flyguy]

Originally Posted by ZUKO

I started looking online out of curiosity and it seems like I could get a cheap cessna for 25-30k. The ideal situation would be to earn my IR,Comm,CFIs in the plane and then sell it.

You'll need a complex to get your Comm and CFI which would mean a more expensive plane, more expensive maintainence, and more expensive insurance. However, you can get your Pvt, IR, and CFII in your cheap cessna and also build all the time you need to meet the aeronautical experience requirements, and rent a complex for just enough time to get proficient and for your checkrides.

[Minnesota_Flyer]

Originally Posted by jrh

Take this advice from a guy who dropped about $36k into all his training, zero time to MEI. I rented the entire time and have no regrets. The FBOs and flight schools I went to assumed all the risk. All I had to do was show up and fly. It was nice.

It is all about how you feel about the risk. I many (most?) cases, you probably can come out ahead on by owning your training aircraft. But I'm not willing to take the risk of being the 1 in 10, 100, whatever that gets hit with a $8k+ annual (or the $20k AD) the first year. I'm happy to let the FBO take that risk. Your risk tolerance may be different, but at least make sure you're eyes are wide open going in.

[MSUDAWG]

Originally Posted by jrh

The same can be said for resale value. Some people make $5k on the resale. Some people break even. Some people lose $5k. There are so many factors involved, nobody can predict exactly what a plane will resell for. You might make a killing, but don't count on it with any certainty.

Even if you lose the 5k on the resale, and you got your priv, instr, comm and cfi in your airplane I would say losing 5k in the resale is well worth the deal........4 ratings and a bunch of time you built all for 5k, seems worth it to me.......(less fuel costs of course)

[jrh]

Originally Posted by MSUDAWG

Even if you lose the 5k on the resale, and you got your priv, instr, comm and cfi in your airplane I would say losing 5k in the resale is well worth the deal........4 ratings and a bunch of time you built all for 5k, seems worth it to me.......(less fuel costs of course)

Less fuel costs...and maintenance...and hangar...and insurance...

Let's say you lose $5k on a C-152. And, to use Mr. Maximus's numbers from a few posts ago, let's say you spend another $8k on everything else (maintenance, hangar, and insurance).

That's $13k. Let's say you fly it 300 hours in those two years. That's $43/hour dry ($13,000/300 hours).

What's fuel going for these days? $3.50/gal? At 6 gph, you're looking at $21/hr in fuel. Total cost would be $63/hr ($43+$21).

At my old FBO I could rent a C-152 for $65/hr wet.

I'm not knocking aircraft ownership. All I'm saying is, aircraft ownership isn't the be all, end all panacea of flight training financial problems. You have to do it just right, and have a little luck, in order to get it to work out noticeably in your favor. Most of the time it's a wash financially.

How much is it worth to have exactly the plane you want, with 24 hour access to it? How much is it worth to proudly say you own an aircraft? How much is it worth to be completely in charge of operating that aircraft in any manner you choose?

Those are intangibles that each person has to think about. But if you're looking from a straight utilitarian point of view, aircraft ownership isn't anything amazing.

[Mr.Maximus]

ZUKO.

There's alot of good information surrounding the renting vs. buying on the previous posts. You may look at buying with a partner that is doing the same thing you are looking to do - thus limiting your exposure to 50% of the costs.

As a side note. I feel I was very lucky with my Cherokee 180. I bought it from a guy that had to sell it - and sold it well before the used aircraft market took a nose dive 4 or 5 years ago. I bought a Comanche after the Cherokee and had to put an additional 20K into the plane on top of the original cost about a year later. Found a cracked cylinder, so I had all new cylinders put in to the tune of 15k as well as alot of other "little things". It's an awesome plane, and I still own it - but owning a plane is definately a risk-reward situation. You just never know what might pop up. I can say it was nice to have it available any time I want to fly it - and it's also nice to know that it hasn't been out getting beat up as a rental. Now the problem is that flying 90 hours a month for a living - the last thing I want to do is go flying "for fun". Alas - pilot are just never happy.

[ElyJs]

If you have the credit to get a loan you are only putting 10% down on the loan for the plane. They offer 20 year terms on airplane purchases. Stay away from turbos (they run hot and put holes in metal more often) retracts, and constant speed props and you will find the mx work shouldn't kill you. There is a certain risk involved but its like owning a house vs renting. If you are in the position to buy an airplane you will blow away even 35k for flight training. I will spend under 20k for my rating through multi/comm cfi. That being said I lucked into getting my 15 hrs complex in a bonanza. I will be renting all of my multi time which will end up putting me over that 20k figure. I have taken my plane on fun trips where I want to go and stay as long as I want to. As DE727 said I really can not understand why more people don't go this route.

Also I have not taken my CFI ride but already have 2 students (friends of mine) lined up. Expecting the CFI by end of March. I can add them to my insurance for almost nothing. (CFI + airplane=flight school). Learn how to do an owner assisted annual well and you can bring that 100 hr cost down quite a bit.

PS I should have room for one more PPL student in April. Anyone interested in a flat rate $4500 PPL in a 172?

-Jason

[EineBeBoP]

Originally Posted by ZUKO

I kind of got to thinking today that it could be a viable option to purchase an inexpensive plane to get all my ratings in and then sell. Saving pretty good money on the rental rates.

My question for you guys... Would you suggest this route? I am sure there are a lot extra expenses on top of the cost. Insurance, mx, hanger space etc.

I am still pretty young with no debt and 10k in savings/investments. I started looking online out of curiosity and it seems like I could get a cheap cessna for 25-30k. The ideal situation would be to earn my IR,Comm,CFIs in the plane and then sell it.

Not sure if it would be worth the hassle at such a young age with out anyone to really guide me except for text resources.

Im in almost the exact same situation. If you decide to do it, lemme know what your process is like, and how things go.

I think once I get a real income, im going to look a lot more seriously into this, but Itd be nice to see someone doing it about the same time, and how that goes.

Good luck man

[n57flyguy]

Originally Posted by DE727UPS

I can't believe more newbies don't go this route. Maybe it's cause there isn't an "on site interview" attached to the deal...

I have actually been thinking of it myself...I would need money quck though and it might be a posibilty.