more aircraft ownership ?'s

killbilly

Vocals, Lyrics, Triangle, Washboard, Kittens
My club just raised the rates a bit. I believe we're fast approaching the point where my rental rate per hour could exceed the overall costs per hour to own, so I'm looking harder at ownership lately.

My needs are pretty simple. I want a decent, reliable, piston single that is IFR certified. Ideally, I'd like a 4-seater, and I'd like to spend less than $40K on one. There's a bunch of 172s, Cherokees and Grummans out there. I'd love a Cardinal but I think they're out of my price range.

I'd probably only keep the airplane for 300-500 hours, possibly more, to complete my ratings up through CFII, and just rent a complex for the Comm. portion. At that point, I'd probably sell it, or possibly re-invest in it to freelance CFI on the side. That's a long way off, though.

I've been doing lots of reading on the AOPA website about ownership and taxes and things like that, and I'm getting a rough idea what the costs are. I have some questions now for the forum:

1) Do any of you have a spreadsheet that you've used to track ownership costs and reserves? Are there any escrow services that can be used for cash reserves on the airplane?

2) Is there a resource that can give me ballpark costs on common repairs, like radios, transponders, vacuum pumps, brakes, etc?

3) Are there any models that fit the bill that I'd want to stay away from? For example - I found a couple Bellanca Super Vikings for sale which were nice and reasonably priced (and complex, no less) but I believe they are partial-fabric airplanes...I don't know anything about the costs involved with those and I'd be concerned about it. Plus, parts availability for a less-common airplane like that frightens me a bit.

I don't know yet if I can afford to own a plane like this for training or not. I've thought about going WAY cheap and picking up a 152, but I'd really like to have better cargo capacity and IFR so I can get the most out of the airplane.

Thoughts?
 

trafficinsight

Well-Known Member
My club just raised the rates a bit. I believe we're fast approaching the point where my rental rate per hour could exceed the overall costs per hour to own, so I'm looking harder at ownership lately.

My needs are pretty simple. I want a decent, reliable, piston single that is IFR certified. Ideally, I'd like a 4-seater, and I'd like to spend less than $40K on one. There's a bunch of 172s, Cherokees and Grummans out there. I'd love a Cardinal but I think they're out of my price range.

I'd probably only keep the airplane for 300-500 hours, possibly more, to complete my ratings up through CFII, and just rent a complex for the Comm. portion. At that point, I'd probably sell it, or possibly re-invest in it to freelance CFI on the side. That's a long way off, though.

I've been doing lots of reading on the AOPA website about ownership and taxes and things like that, and I'm getting a rough idea what the costs are. I have some questions now for the forum:

1) Do any of you have a spreadsheet that you've used to track ownership costs and reserves? Are there any escrow services that can be used for cash reserves on the airplane?

2) Is there a resource that can give me ballpark costs on common repairs, like radios, transponders, vacuum pumps, brakes, etc?

3) Are there any models that fit the bill that I'd want to stay away from? For example - I found a couple Bellanca Super Vikings for sale which were nice and reasonably priced (and complex, no less) but I believe they are partial-fabric airplanes...I don't know anything about the costs involved with those and I'd be concerned about it. Plus, parts availability for a less-common airplane like that frightens me a bit.

I don't know yet if I can afford to own a plane like this for training or not. I've thought about going WAY cheap and picking up a 152, but I'd really like to have better cargo capacity and IFR so I can get the most out of the airplane.

Thoughts?
I guarantee you your club is not making that much money.

With insurance, parking, maintenance, and fuel, our club airplanes have to fly 40 hours a month to break even. Any less than that and they lose money. I would guess that your costs would be similar, with the exception of insurance, which would be slightly cheaper because you'd only have personal/business coverage rather than renter coverage... but the difference is not that much.
 

killbilly

Vocals, Lyrics, Triangle, Washboard, Kittens
I guarantee you your club is not making that much money.

With insurance, parking, maintenance, and fuel, our club airplanes have to fly 40 hours a month to break even. Any less than that and they lose money. I would guess that your costs would be similar, with the exception of insurance, which would be slightly cheaper because you'd only have personal/business coverage rather than renter coverage... but the difference is not that much.
You're probably right about that. However, it's something I've considered for a long time (and still am) and there is the convenience of being able to fly when I want to which is appealing. Plus, I have more control of the costs, and there are some business-use-cases which may help offset the cost of ownership as well.
 

MusketeerMan

Well-Known Member
I'm a part owner in an airplane, and I recommend if you're going to buy an airplane to go into a partnership with someone. I'm in with 2 other guys and it's worked out great! It definitely saved me money throughout my training and was a blast to fly when I just wanted to.

My costs were fairly minimal, mainly because we never really had any unexpected issues arise in the last 3 years. Our partnership was fairly simple. We all have a joint bank account that we pay our hours into and we use the credit card attached to the bank account to pay for our fuel. We charged ourselves $60/hour, which included fuel and about an extra $12/hour for oil changes and general maintenance or small things that came up. You don't need an escrow account..just manage how many hours it's been flown and set it aside.

By splitting everything 3 ways, it worked out great. Our insurance total was $1100/year, so about $350 each/year. For our fixed costs, we each put in $50/month into a savings account, so at the end of the year we should have the money already set aside for the annual. Any extra cash in there would be left in there for the next annual. Our other fixed costs are the hangar fees.

Scheduling is done through a free Yahoo account using their calendar and we've maybe had 3-4 conflicts since we've owned the plane.

Any other questions...let me know!
 

HeyEng

NAHB Doesn't Give a Crap
I agree with MusketeerMan. The partnership is a good way to go. I too am looking at the possiblity of getting an airplane, for most of the reasons you have stated. I also would want to keep it for the freelance thing here in a few years. The only thing I worry about partnership-wise (for me) is if I have to relocate. If I get transferred, now I would need to sell my share and let's face it, in this economy that could be difficult. I'm not even sure how hard it is (is going to be) to unload and airplane if Avgas goes to 8-10-12 bucks a gallon. That is a tough one...renting has it's distinct advantages, but owning does too. Please keep us up to date on what you find out and what you do!!!
 

ctab5060X

Well-Known Member
For example - I found a couple Bellanca Super Vikings for sale which were nice and reasonably priced (and complex, no less) but I believe they are partial-fabric airplanes...I don't know anything about the costs involved with those and I'd be concerned about it. Plus, parts availability for a less-common airplane like that frightens me a bit.
The only thing extra that you really need for fabric aircraft is a decent hangar to keep it protected.

As far as less common airplanes...lots of times there are clubs for owners of that type or particular manufacturer that can help you with problems and parts procurement.
 

Michael95U

Well-Known Member
I don't know yet if I can afford to own a plane like this for training or not. I've thought about going WAY cheap and picking up a 152, but I'd really like to have better cargo capacity and IFR so I can get the most out of the airplane.
You are going to find that 152's just aren't that cheap anymore. There are some on the market for over $40k!?!?!??!

I would highly recommend a Grumman Cheetah or Traveler (the Cheetah being the better of the two). I helped broker a deal for a Cheetah last summer (the student bought it and then did his instrument training with me). It is a solid airplane that is still relatively fast on a lower fuel burn and is comfortable. Plus, the back seats lay flat so you can really put a lot back there.

Michael
 

killbilly

Vocals, Lyrics, Triangle, Washboard, Kittens
You are going to find that 152's just aren't that cheap anymore. There are some on the market for over $40k!?!?!??!

I would highly recommend a Grumman Cheetah or Traveler (the Cheetah being the better of the two). I helped broker a deal for a Cheetah last summer (the student bought it and then did his instrument training with me). It is a solid airplane that is still relatively fast on a lower fuel burn and is comfortable. Plus, the back seats lay flat so you can really put a lot back there.

Michael
The really nice, cherry 152s with low time are pushing $40K, true, but there are quite a few in the mid-20s with various ages and avionics stacks. One good thing is that most of them seem to get flown a lot, so the motors tend to be in decent shape, according to the mech I've been talking to.

I've seen some relatively affordable AA1s and AA5s, but I don't know if that's equal to the designation cheetah. The Grumman tigers are quite expensive - well over 50K for the ones I've seen. Suppose I should do some more research. With the numbers I've been crunching so far, it looks a little bleak.

:confused:
 

Nihon_Ni

Well-Known Member
I used to own a Grumman TR-2 (AA-1B) & a Piper Seneca. I owned the Grumman privately for 6 years and flew 500 hours in that time, and owned the Piper for a year (all of it on lease-back). I agree with trafficinsight, your club may be raising the rates but they aren't making profit like you may think. For example, my Seneca had to fly 21.4 hrs a month to break even. If it only flew 20 hrs a month, I would loose about $200 that month, if I remember my figures correctly. Even the club manager told me I was making money hand over fist with a rental rate of $175/hr, but when I showed him my books he realized that there were very few months where the plane actually made a profit.

I have a spread sheet I used for my Seneca that I'd be happy to share with you. PM me your email address and I'll send it to you.

The first step in buying an airplane is to read Airplane Ownership by Ron Wanttaja. The bottom line is that owning is more expensive than renting for the majority of folks. Most people just don't fly the number of hours required to make owning cheaper than renting. That's why you see a lot of airplanes in partnerships -- a handful of people may fly an airplane enough to make it cheaper than renting, or at least cheap enough to justify the additional expense of having their own wings.

To estimate typical repairs try asking your local mechanics. You may also speak to your flying club. Before I bought the Seneca, I talked to several other owners and looked at their income & expense reports. The airplane was in a least-back when I purchased it, so looking over the records of the previous owner gave me some solid information that I used to make my own calculations.

As far as models to stay away from, that all depends on your priorities. If you are serious about turning your airplane into a freelance (not exactly sure what you mean by that) or leasing it to a FBO, then I wouldn't stray too far from the industry standards: C-172 or PA-28. Most pilots who rent are checked out in one of these two planes. You may consider something a little more uncommon, such as an AA-5/5A/5B and in the right market that could be really marketable. I am personally a huge fan of the Grumman line, and there are others who will seek out unusual airplanes to rent, but the bulk of pilots simply don't fly enough to maintain currency in more than one M&M airplane.

If you're not serious about turning your airplane into a rental plane, then you can buy something that suits your personal tastes more than the average pilot's. The good thing about airplanes that aren't that common is that you get more airplane for your money simply because they are not in such demand. The payback for that value will come when it's time to sell, and it may take you months and months to sell something other than the most popular of airplanes.

Rob
 

trafficinsight

Well-Known Member
The really nice, cherry 152s with low time are pushing $40K, true, but there are quite a few in the mid-20s with various ages and avionics stacks. One good thing is that most of them seem to get flown a lot, so the motors tend to be in decent shape, according to the mech I've been talking to.
40k? Try 50-60k!
 

killbilly

Vocals, Lyrics, Triangle, Washboard, Kittens
I used to own a Grumman TR-2 (AA-1B) & a Piper Seneca. I owned the Grumman privately for 6 years and flew 500 hours in that time, and owned the Piper for a year (all of it on lease-back). I agree with trafficinsight, your club may be raising the rates but they aren't making profit like you may think.
Oh, most certainly. I know the margins are thin, and frankly I was surprised that the owner didn't raise the rates sooner. I've just been looking at my own economic health and if an ownership/equity proposition made sense. The idea I'm working under mainly is that the number of hours I'm planning to fly is fairly fixed - 200 per year is going to be a conservative estimate if I can afford it.


So based on that, I look at what my per-hour costs are to rent vs. what they would be to own, and then I have to determine if the scheduling and equity capabilities make enough sense since they're soft-dollar values. I'm not sure yet, and I'm trying very hard not to rationalize to get the answer that I'd like to hear, y'know?
I have a spread sheet I used for my Seneca that I'd be happy to share with you. PM me your email address and I'll send it to you.
I will send that right after posting this. Thanks!

The first step in buying an airplane is to read Airplane Ownership by Ron Wanttaja. The bottom line is that owning is more expensive than renting for the majority of folks. Most people just don't fly the number of hours required to make owning cheaper than renting. That's why you see a lot of airplanes in partnerships -- a handful of people may fly an airplane enough to make it cheaper than renting, or at least cheap enough to justify the additional expense of having their own wings.
Good tip on the book - thanks.

On partnerships, I'm not completely averse to it, but there are two issues I have - one, I don't know many people down here, and when/if I get into a business partnership like that, I would really only feel comfortable with it if I really knew the person I'm working with. That's mostly in my head, I'm aware, but 'know thyself' serves me well in this case. I'm not sure I could reasonably do a partnership unless it was a pure cash situation. And in this case, I'm considering financing. The bailout options on the contracts and stuff truly frighten me.

To estimate typical repairs try asking your local mechanics. You may also speak to your flying club. Before I bought the Seneca, I talked to several other owners and looked at their income & expense reports. The airplane was in a least-back when I purchased it, so looking over the records of the previous owner gave me some solid information that I used to make my own calculations.
I considered some leaseback options. At least in the this market, the only way I could make a leaseback attractive-workable is to buy either a twin or a fairly high-performance complex aircraft. Both are out of my budget range unless I pick something up REALLY lower-cost, like a very old Mooney, Bellanca, something along those lines. I eliminated a Bonanza a long time ago due to costs. They have HIGH resale value.

You may consider something a little more uncommon, such as an AA-5/5A/5B and in the right market that could be really marketable. I am personally a huge fan of the Grumman line, and there are others who will seek out unusual airplanes to rent, but the bulk of pilots simply don't fly enough to maintain currency in more than one M&M airplane.
Flew a Tiger once when I was a kid. Loved it. Good point about rental. But again, I'm not sure I want to put it out for rental. This would be personal/business use, and later, potentially something to instruct in. But right now, it's hard to factor in 'potentially' - there's no reasonable dollar-variable I can attach to such a great unknown. Again - knowing myself, I don't know if I'll want to do that later or not. So the idea becomes a game of "how best to position myself for options, rather than a set-piece scenario?"


40k? Try 50-60k!
I haven't seen any 152s that high.

Well...one. I just ran a search on TradeaPlane for IFR-certified 152s. 5 ads returned, although there were six in one ad, so a total of 11 aircraft. Of the 11, only one came in at $60K and it is loaded with lots of toys, including an autopilot. The rest ranged between $31K to $43.5K. A quick spot check revealed several very nice examples in those price points. Also - the six in the ad are from a broker rather than a private seller.

The Grummans I've seen all ranged in the 25-40K range mostly for the older, smaller models and the Tigers in the $60-$80K range.

This is all great advice. Thank you for the input, folks. Really helpful. I'll go look for that book, too.
 

Customx

Well-Known Member
If you are interested in purchasing a plane together next March, send me a PM. I'll be moving back to the States from Korea and want to start earning my ratings.
 

Nihon_Ni

Well-Known Member
I considered some leaseback options. At least in the this market, the only way I could make a leaseback attractive-workable is to buy either a twin or a fairly high-performance complex aircraft. Both are out of my budget range unless I pick something up REALLY lower-cost, like a very old Mooney, Bellanca, something along those lines. I eliminated a Bonanza a long time ago due to costs. They have HIGH resale value.

Flew a Tiger once when I was a kid. Loved it. Good point about rental. But again, I'm not sure I want to put it out for rental. This would be personal/business use, and later, potentially something to instruct in. But right now, it's hard to factor in 'potentially' - there's no reasonable dollar-variable I can attach to such a great unknown. Again - knowing myself, I don't know if I'll want to do that later or not. So the idea becomes a game of "how best to position myself for options, rather than a set-piece scenario?"
An option you might consider is to buy a plane as a rental, lease it back to your local school, and then do all of your flying in it. That way, you get more usage on the plane than you can support alone. Although it will raise the total expenses, see if the additional income will be enough to offset those costs and provide you enough to pay the mortgage. There were a few members at my previous flying club who purchased airplanes, put them on lease-back and then rented them along with other members while there were getting their ratings. One guy I knew had his plane there just long enough to get his private and IR, pay off the mortgage on the airplane, and save up enough reserve money for new paint & interior and an engine overhaul. Once he accomplished all of that, he took his plane out of the lease, spent his reserve money on paint, interior, and an engine overhaul and had a nearly new airplane that he owned outright and enjoyed all by himself. I planned to do the same thing with my Seneca, but it didn't work out to be profitable. At least I was able to get some discounted flight time and some very valuable business experience, so it wasn't a total loss.
 

killbilly

Vocals, Lyrics, Triangle, Washboard, Kittens
An option you might consider is to buy a plane as a rental, lease it back to your local school, and then do all of your flying in it. That way, you get more usage on the plane than you can support alone. Although it will raise the total expenses, see if the additional income will be enough to offset those costs and provide you enough to pay the mortgage.
I did look into this. It would be viable if I bought a complex aircraft. I talked to the guy who runs my club and that's what he indicated that we need, but that he would not be interested in a leaseback of a fixed-gear single since we already have 4.

It's quite a ways off. I'll have to look it over and figure it out. You raised an interesting point in your earlier post, too. Even in leaseback, I'd have to calculate a reserve cost to hold on to in case the plane doesn't fly enough one month.
 

The Gardener

Terrafirma Phobic
You're probably right about that. However, it's something I've considered for a long time (and still am) and there is the convenience of being able to fly when I want to which is appealing. Plus, I have more control of the costs, and there are some business-use-cases which may help offset the cost of ownership as well.

Not a chance. when you own and a radio gives out you have to pay the costs directly.

If the radio burns up in a club aircraft you write a squawk and go home. End of headache.

Not saying that a/c ownership isn't a good thing, but it is a challenge!
 

killbilly

Vocals, Lyrics, Triangle, Washboard, Kittens
Not a chance. when you own and a radio gives out you have to pay the costs directly.

If the radio burns up in a club aircraft you write a squawk and go home. End of headache.

Not saying that a/c ownership isn't a good thing, but it is a challenge!
Good example, but let me offer a counterpoint. Yeah, I gotta pay for it....

But I get to determine what the replacement will be. I get to shop for the best deal on it. I also get to determine when and if it gets done at all. And, with the right supervision, I might even get to do it myself. :)

I apparently have control issues. :)
 

Nihon_Ni

Well-Known Member
It's quite a ways off. I'll have to look it over and figure it out. You raised an interesting point in your earlier post, too. Even in leaseback, I'd have to calculate a reserve cost to hold on to in case the plane doesn't fly enough one month.
That's not what I meant when I used the term "reserve". A reserve pays for major scheduled maintenance. For example, say the aircraft you buy has 1000 hrs on the engine and the manufacturer recommends a TBO of 2000 hrs. If it costs $20,000 to overhaul then for every flight hour, you need to reserve $20 towards overhaul. I put paint, interior & avionics on a calendar schedule. Every month I reserved money based on the expected life remaining in each of these items over the cost to replace them. That way, when these major scheduled maintenance items come due, you have the money set aside (or "reserved") to pay for them.

As far as money to pay for the plane during unprofitable months, that's a whole different ball of wax. You'll need to come up with that from somewhere else.
 

killbilly

Vocals, Lyrics, Triangle, Washboard, Kittens
That's not what I meant when I used the term "reserve". A reserve pays for major scheduled maintenance. For example, say the aircraft you buy has 1000 hrs on the engine and the manufacturer recommends a TBO of 2000 hrs. If it costs $20,000 to overhaul then for every flight hour, you need to reserve $20 towards overhaul. I put paint, interior & avionics on a calendar schedule. Every month I reserved money based on the expected life remaining in each of these items over the cost to replace them. That way, when these major scheduled maintenance items come due, you have the money set aside (or "reserved") to pay for them.

As far as money to pay for the plane during unprofitable months, that's a whole different ball of wax. You'll need to come up with that from somewhere else.
Yeah - I knew what you meant, I was just talking about an additional small "fudge" reserve to offset those months.

In doing the research (and this has been interesting) the only way I think I could do this comfortably would be to buy the plane outright for cash. I can absorb much of the costs and make it cheaper to own without a note on it, but factoring in a payment really makes that difficult.

Which means I need to wait a while and save. But it has been an interesting exercise and I've learned quite a bit. I may reconsider somewhat if I see an opening for a partnership come up in an already-established group.
 

CoffeeIcePapers

Well-Hung Member
It might not be worth all the headaches. One costly item on the annual can eat all of your savings right up.

Acquisition Costs:

Down Payment: $2-4k
Good Pre-Buy: $400 or so

Fixed fees:

Tie Down: $30+/month or Hangar: $200/month+
Bank Note: $400/month
Insurance: $50-100+ a month
Annual: $1000 minimum, just for the inspection

Hourly Costs:

Fuel: $40 an hour ($5 x 8GPH) and you can expect that to go up to $6 shortly, I would presume.
Routine Maintenance (Depends on hours flown): $5-$10/hour
Engine Reserve (Depends on hours on the Engine, TBO, Hours you fly): $10-20 per hour

Those are just off the top of my head, if anyone wants to add/critique, FELL FREE!

Since you are wanting to sell your airplane, you may not want an engine reserve, but I would definitely build a good maintenance reserve. There is a lot of fixed costs involved, and maintenance can be very expensive.

Good luck!
 
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