jrh
Well-Known Member
I'm jumping in to this thread a bit late, but here's my take on the situation:
TUCRACEMAN, what is your ultimate goal? To make money? To build time? To have a nice plane to fly your family around in? Some combination of all of the above?
All of the posts I've seen to this point have basically told you it's a lousy idea without any clue of what your personal circumstance is.
It's rare to have a leaseback agreement that will actually turn a profit. If your goal is strictly to make money, you'd be better off getting a second job at McD's than to try to turn a profit off of a leaseback aircraft. The only aircraft that actually turn a sizable profit are aircraft that fly 70+ hours/month at busy flight schools.
However, a leaseback can be a great way to either make an aircraft cheaper to own, or allow you to afford a plane you wouldn't ordinarily be able to afford on your own. Maybe your budget allows you to own a 152 or 172 by yourself, but by doing a leaseback, you can get a 182. You're essentially trading aircraft availability for added performance.
The break even points for most leasebacks are somewhere in the 40-50 hour/month window. If the plane flies more than that, you make a little money, if it flies less, you'll lose a little.
The thing is, how much would you spend to own this plane on your own? Maybe $1000/month? Even if you're losing money on the leaseback, if it flies enough to only lose $800/month, you're coming out ahead. Run the spreadsheets and find out how much it needs to fly in order to be a better deal than owning it by yourself, rather than trying to figure out how to turn a true profit.
Something else to consider are the tax benefits. Are you in a high enough tax bracket for it to matter? If you put the aircraft in its own LLC and treat it as a business for leasing it back to an FBO, the expenses associated with it can be tax deductible. If you're paying 35% income tax, writing off X thousand dollars in business expenses for the aircraft can save a considerable amount on your taxes.
As for how much it flies, that's HIGHLY dependent on your local FBO. How much do they need it? How much are they willing to promote it? What demographic do they generally rent to? Timebuilding college students are very different from high income individuals who want to fly around the country for business/pleasure.
Several people here are skeptical of how often it will fly. That might be true for their home airport. But you're dealing with your airport, not their airport. Do your own research in to your local airport and make your decision accordingly.
TUCRACEMAN, what is your ultimate goal? To make money? To build time? To have a nice plane to fly your family around in? Some combination of all of the above?
All of the posts I've seen to this point have basically told you it's a lousy idea without any clue of what your personal circumstance is.
It's rare to have a leaseback agreement that will actually turn a profit. If your goal is strictly to make money, you'd be better off getting a second job at McD's than to try to turn a profit off of a leaseback aircraft. The only aircraft that actually turn a sizable profit are aircraft that fly 70+ hours/month at busy flight schools.
However, a leaseback can be a great way to either make an aircraft cheaper to own, or allow you to afford a plane you wouldn't ordinarily be able to afford on your own. Maybe your budget allows you to own a 152 or 172 by yourself, but by doing a leaseback, you can get a 182. You're essentially trading aircraft availability for added performance.
The break even points for most leasebacks are somewhere in the 40-50 hour/month window. If the plane flies more than that, you make a little money, if it flies less, you'll lose a little.
The thing is, how much would you spend to own this plane on your own? Maybe $1000/month? Even if you're losing money on the leaseback, if it flies enough to only lose $800/month, you're coming out ahead. Run the spreadsheets and find out how much it needs to fly in order to be a better deal than owning it by yourself, rather than trying to figure out how to turn a true profit.
Something else to consider are the tax benefits. Are you in a high enough tax bracket for it to matter? If you put the aircraft in its own LLC and treat it as a business for leasing it back to an FBO, the expenses associated with it can be tax deductible. If you're paying 35% income tax, writing off X thousand dollars in business expenses for the aircraft can save a considerable amount on your taxes.
As for how much it flies, that's HIGHLY dependent on your local FBO. How much do they need it? How much are they willing to promote it? What demographic do they generally rent to? Timebuilding college students are very different from high income individuals who want to fly around the country for business/pleasure.
Several people here are skeptical of how often it will fly. That might be true for their home airport. But you're dealing with your airport, not their airport. Do your own research in to your local airport and make your decision accordingly.
