Are General Aviation Airplanes a Prudent Investment?

ILSstud

ILSstud

Well-Known Member
So I am looking around at various airplane vendor sites and a few classifieds and I am wondering to myself, are general aviation airplanes really a prudent financial investment? Specifically how likely is it that you buy an airplane, use it for a period of time, and then make a profit upon selling it. Judging by how these days seem to be an airplane buyers paradise, I feel like quite a few people who bought into this notion several years back are getting shafted on this "financial investment."

I've always wanted to own my own airplane, and started saving way back in high school (every little bit counts right??), but I am starting to wonder how good an investment an airplane really is. Feel free to chime in if you own your own aircraft, I'd love to hear your opinions!
 
The bottom line is, no. There are exceptions, though. A good example of this was the left over aircraft of WW2 that sold for $3k, now the p51s are selling for $1m. As far as GA aircraft, like the Cessnas and pipers; it's hard to make the money you invested in it back. Don't get me wrong, I'm sure it happens from time to time, but for the most part you will not get what you invested into it when it comes time to sell.
 
An airplane isn't an investment in the way securities or real estate are. Every hour an airplane is flown, it's worth less than it was previously. Every hour reduces the useful life of the engine & components. Every month the paint & interior wear out and the avionics become more and more outdated.


I've owned two airplanes so far. The first was for my personal use; the second I had on a leaseback to an aero club. For my personal airplane, it didn't really matter to me that the airplane depreciated with each passing day and flight hour. For me the benefits of ownership over shadowed the loss in value. For my business airplane, the trick was to make enough profit to offset the depreciation, pay the mortgage, and compensate my time...which wasn't as easy as it sounds.
 
I own a baron. I probaby will be able to sell it for more than I got it for however, maintenance is EXPENSIVE and over I wont make any sort of profit...BUT it is deffiently worth it for the fun Iv had with my plane..and its only been a year!
 
Yes, an airplane is a fantastic investment! And a bridge is an even better investment. I happen to have one for sale in Brooklyn if you are interested.

But honestly, probably not. I owned a 152 for a while. When I bought it, it was equipped for VFR. I put a new radio and audio panel in it and made it IFR capable. I ended up getting a few thousand more for it than what I paid for it, but any gain was eaten up by maintenance.

But there are other benefits of owning.
 
Short answer no.

But if you did everything right, got very lucky, and planned very well they could be.
 
A friend of mine bought a 152 and did a lease back with a local flight school. After about a year he was about breaking even on it. And that was with it flying a lot. This was until someone crashed it in Gatlinburg. Then he lost money from the insurance settlement. Tried to get the pilot to reimburse him, but i'm sure you can guess how that went.
 
ILSstud said:
So I am looking around at various airplane vendor sites and a few classifieds and I am wondering to myself, are general aviation airplanes really a prudent financial investment? Specifically how likely is it that you buy an airplane, use it for a period of time, and then make a profit upon selling it. Judging by how these days seem to be an airplane buyers paradise, I feel like quite a few people who bought into this notion several years back are getting shafted on this "financial investment."

I've always wanted to own my own airplane, and started saving way back in high school (every little bit counts right??), but I am starting to wonder how good an investment an airplane really is. Feel free to chime in if you own your own aircraft, I'd love to hear your opinions!
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In fact right now is about the time to buy. If there has been a better time to get fairly decent boxes for a dime and a half in the last 6 years I've been following and playing the market - I'd be surprised.
I'd still refuse to describe the purchase of anything other than a house or stocks an "investment". It's a purchase and like every purchase there is a tremendous opportunity for depreciation or loss. Buying the thing is only half the rent, having a properly thought out mission profile, and the financial means to maintain, hangar and care for the bird later on, is key. I do not currently own, but have in the past. Would I buy currently? Unless it has two fans, No!
 
No, airplanes are slightly worse than boats as an investment. They are toys, which require lots of expensive upkeep.



however,
Baronguy18 said:
I own a baron. I probaby will be able to sell it for more than I got it for however, maintenance is EXPENSIVE and over I wont make any sort of profit...BUT it is deffiently worth it for the fun Iv had with my plane..and its only been a year!
Click to expand...

You can chose carefully and recover most of your initial purchase price. High performance singles (Bonanzas, Mooneys, Cirri, ect) tend to hold their value well. Classics that are in good condition will be in demand as well. Experimentals from a reputable designer can usually be sold for the price of the componets (kit, engine, radios), but none of the labor the builder put into it.
 
In short...no. Can it be cheaper than renting? Perhaps...but for me (with a nice cheap Cherokee) after having it for 1.5 years, I would have saved money by renting.

Something to consider...what if your engine decides to come apart...for whatever reason. Let's say that reason isn't covered by insurance. Can you take the $15K+ hit on the loss?

If I had to do again, I probably wouldn't buy. I love it about 80% of the time, but hate it the other 20%. It is a love/hate relationship. If it wasn't for my job, I would be ALL OVER a partnership!!!
 
So basically...the moral of the story is that airplanes are just expensive toys that you have to be in a financial position to eat up unexpected costs such as maintenance, insurance issues, etc...I best keep saving! Realistically, I'd like to start small (i.e. good condition Warrior or even a Piper Cub or 152), how are the costs associated with planes like this? For example, can a middle class, single guy, with no debt reasonably afford to upkeep a plane like this with proper planning. I always feel like planes are toys strictly for wealthy people.
 
I've been pretty vocal on here about how I think the airplane market is over saturated, and going to get worse. I'll give the short version - operation costs rising, number of pilots losing medicals increasing, number of new pilots to replace them decreasing.

I just can't see how this is going to pick back up again - at least for the used a/c market.
 
Well, I am planning the purchase of a twin within the year I hope. The prices are still coming down and I agree that will be the general trend overall with exceptions for the reasons others have mentioned on here already. I plan to use my aircraft, and infact purchase it through my business so I hope I can at least offset some of my costs and expenses.

To qualify, I have owned an aircraft before so not going into this blind.

I am not thinking this as an investment at all. At one time I thought my investments in Good company stocks were investments! Ha Ha, not so I guess either, so I'll just enjoy life and this is my plan:

When on the ground bitch about the costs of ownership, etc and when flying, sit back and smile!
 
USMCmech said:
No, airplanes are slightly worse than boats as an investment. They are toys, which require lots of expensive upkeep.
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Personally I think its the other way around, but that just me:insane:

I've owned three airplanes, a 76 C150, a 64 Cherokee 235, and I currently own a 77 C150. I've never considered an airplane an investment, I use them for a time-building toy, or as a traveling(not so much with the 150:D) tool.

I bought the 76 for 7k and sold for a profit after about 3 years, the 235 was a loss, but not much, I did a lot of travel in between NM and GA in the 235. The 77 150 I paid just under 18K with 100 hours on a rebuilt motor and an airframe that was in excellent shape, I could probably get what I paid for it right now.

Right now is a great time to buy, prices are as low as they are going to go. The secret to buying is your willingness to pay an A&P you know well and trust to go with you and both of you do your own very thorough annual inspection for a prebuy inspection, even if the seller is offering an annual with purchase. If they are not willing to let you do that, walk....no, run away.

Consider all the costs, hanger/parking, insurance, annuals, unexpected Problems. Also consider how much you expect to fly it, cost per flight hour goes up the less you fly, airframes and engines don't react well to sitting for long periods of time.

Good luck
 
ILSstud said:
I always feel like planes are toys strictly for wealthy people.
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Have you seriously looked at homebuilts?

That is where most of the "average joes" own their own airplane. Take the Vans RV series for an example. Vans has been in buisness for 35 years, and there are 6500 of their planes completed and flying. The average cost of a basic RV-7 would be about 50-65K. For that money, you get a new airplane that will outrun a Bonanza, and can do aerobatics,

By building the thing yourself, you will learn more about aircraft maintence than many A&Ps. I've helped several builders, and there is a very gradual learning curve in the building process. You can do all the maintaince yourself. Unlike old pipers, there are LOTS of inovative new products available, and you can customize the design to suit your needs.

Many pilots hear the word "homebuilt" and scoff at something not certified by the FAA. Then they climb into a 25 year old flight school Cessna that is in horrible condition. Most of the homebuilts I have seen are in imaculate shape.

If I won the lotto tonight, I would still build an RV-7 vs buying a "Spam Can".
 
I agree, especially the RV series I'm building an RV-9 (haven't touched it since I went to Florida:mad:) You will learn a tremendous amount about airplanes, and you find out that riveting is not as difficult as it looks.

New RV kits even have most of the metal precut and holes prepunched, if your interested go to http://www.vansairforce.net/ which is a builder/flyer site and www.vansaircraft.com which is the company site

Most airplane owner/pilots I know are far from wealthy, they just sacrifice other things to do what they love to do
 
With few exceptions, an airplane is not an investment. I own a very nice piston twin, that also happens to be for sale, and regardless, I am going to lose money on the deal.

If I do the personal plane thing again, it will absolutely be experimental.
 
How about LSA's? Think they'll hold value in the coming years? Or do you guys think that LSA's will enter the market and have their value plummet.

Or in other words, am I going to be lucky enough to find a 2009 J3 Sport Cub on the market for $50,000 in a few years? :)
 
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