The Idea: Leasing a Plane for/while training.

[Boots2Wings]

So I have been muddling around ideas on how to stretch my dollars in flight training, they simply go much faster that I had anticipated. This is largely to do with the rate Im training (3-5hrs of flight a week with 2-4 hours of ground) since I am trying to avoid a "non flying job" for a long period of time after I complete my degree in the fall. I am currently only a bit past halfway into my PPL, but plan to take the long haul up to ATP someday.

My specefic idea is to buy a plane, C172 of some sort, and lease it to a school (in all likelihood the one I train at). I have seen costs for older models ranging from 30-60k. I figure at this cost, for roughly the costs of IFR, Commercial, and CFI (where I need to be realistically to fly for work) i would essentially break even with rental savings.

Where it gets interesting Is that I have read up on some school leases like this, the school agrees to pay the insurance, housing, maitanence, fuel, etc for 80-90% the rental cost for who they rent it to.
So essentially I buy the plane, fly it for my own training (paying fuel costs only), then make roughly 10% off hourly rentals (which the going rate for the 172s at my school is roughly 120-160 depending on the model)

My whole thought process with this is,
1) "Im saving money in the training run, since I wont be spending 3k month on renting"
2) "I make a profit (albeit small) that I can then use to pay towards the airplane, that has the potential to be several hundred dollars a week since the school is very busy"

3) "It would not sit idle since there are seemingly too few planes, and others are constantly out of service"

4) "Planes do not seem to depreciate as rapidly as autos, therefor I could lease it until I no longer practically needed it for training or keep it longer should I make an actual profit profit.

Sorry it was a long read, but I need help turning off this lightbulb moment.

Cheers,
Zak

 

[CoffeeIcePapers]

It can be done, but there is risk. What if a student bends the firewall? That's 10k plus a month down. Ask @Goonie what can happen.

 

[fholbert]

Buy a plane, learn to fly-in it, sell the plane.

Assuming you only put 100 hours on it, it'll sell for what you paid for it.

 

[mshunter]

Lease backs are tricky. There is potential to make money. There is also a HUGE potential to get burned. If you plan on doing it, get an attorney involved before you lease it to anyone. One that is familiar with it. Because if there is a problem, there will be I've involved for the other party.

 

[CoffeeIcePapers]

Buy a plane, learn to fly-in it, sell the plane.

Assuming you only put 100 hours on it, it'll sell for what you paid for it.

I don't think there is much advantage to owning a plane for 100 hours and selling it.

 

[Vector]

I actually looked into it a while ago as my friend did the same thing and made money. The way he went about it was that he was the middle man when something maintenance related happened. He shopped around the country for the cheap parts and in some cases replaced/fixed himself with the oversight of an IA. Also, the aircraft he bought was a C172S that was well kept, so the annual and maintenance weren't the unexpected. He also did his oil change himself. Again, you will have to be involved to make it worthwhile. With a college schedule, I doubt you will have the time.

 

[texas_pilot]

Buy a plane, learn to fly-in it, sell the plane.

Assuming you only put 100 hours on it, it'll sell for what you paid for it.

Buy a plane, learn to fly-in it, sell the plane.

Assuming you only put 100 hours on it, it'll sell for what you paid for it.

I suggested my Cherokee 140 mentioned on the Trading post would have saved me a bundle before in training costs. Low hours, fresh engine, many improvements, a joy to fly with 1967 reliability.

 

[SlumTodd_Millionaire]

I don't think there is much advantage to owning a plane for 100 hours and selling it.

I don't think you've got an appreciation for just how expensive it is to rent nowadays. If I fly my plane for just 26 hours per year, I'm coming out ahead by owning instead of renting. Didn't used to be that way, but it is now. Renting has gotten absolutely out of control.

 

[hook_dupin]

I have a very tiny aircraft leasing business. Here's what I've learned so far:

1. If the flight school owner you have your airplane leased at is a crook, you'll never make money.

2. With the right airplane, the right market, and the right flight school, you might make money.

3. You can find better performing investments with $30K-$250K that require less intensive management on your end.

 

[CoffeeIcePapers]

I don't think you've got an appreciation for just how expensive it is to rent nowadays. If I fly my plane for just 26 hours per year, I'm coming out ahead by owning instead of renting. Didn't used to be that way, but it is now. Renting has gotten absolutely out of control.

I can rent a 2013 G1000 172 for $150/hr. or a 2001 172R for $135/hr. with nearly no risk. I guess it depends on your market and your risk tolerance.

 

[SlumTodd_Millionaire]

I can rent a 2013 G1000 172 for $150/hr. or a 2001 172R for $135/hr. with nearly no risk. I guess it depends on your market and your risk tolerance.

At those prices, I only need to fly about 30 hours a year to do better with owning. You should run the numbers. It really surprised me when I started doing the figuring. Even putting in some rather liberal maintenance reserves, renting doesn't make sense unless you're only flying a few hours a year.

 

[CoffeeIcePapers]

At those prices, I only need to fly about 30 hours a year to do better with owning. You should run the numbers. It really surprised me when I started doing the figuring. Even putting in some rather liberal maintenance reserves, renting doesn't make sense unless you're only flying a few hours a year.

Maybe when I get out of the game, I will. The last thing I want to do is touch an airplane on my time off.

 

[SlumTodd_Millionaire]

Maybe when I get out of the game, I will. The last thing I want to do is touch an airplane on my time off.

Understood. I was the same way.

 

[z987k]

Maybe when I get out of the game, I will. The last thing I want to do is touch an airplane on my time off.

You don't get enough time off then.

 

[CoffeeIcePapers]

You don't get enough time off then.

I fly about 20-30 hours a month.

 

[gne in prog]

The first part of point 3 could easily lead to the 2nd part of point 3.

 

[Boots2Wings]

Interesting, i honestly figured there was some HUGE thing I was overlooking, but appearently there is some validity to my watercloset logic.

To clarify my main idea in leasing a plane , i am essentially looking to offset or minimize my training costs (up through cfi). Currently I rent a plane for about 140/hr, averaging 3k a month in rental fees. Im wondering if its not more cost effective to simply buy a plane, fly it, then lease it out to offset the loan (cost of the aircraft). Once it out lived its use as my training aircraft (or as a profit generator) I would sell it for roughly the purchase price and have saved considerably on the training costs.

Sorry the reply took a minute. On vacation in Alaska and my phone doesnt much like to work.

 

[z987k]

The leasing wont be worth the headache, but you'll probably save money buying.

 

[hook_dupin]

Interesting, i honestly figured there was some HUGE thing I was overlooking, but appearently there is some validity to my watercloset logic.

It could work. It could also be a huge money-pit. You need to find the right flight school operator to partner with.

I had my first lease-back with a shady operator. He was trying to get a 141 certificate for his school and he ran a maintenance shop as well. When the feds came around to inspect his fleet, all his aircraft were "off flying." Mine was on the ground and got numerous write-ups from the feds (never mind that my aircraft was not intended to be on the 141 cert). He then charged me for all that work to be accomplished. Essentially, my airplane was allowed to be the sacrificial lamb while he hid his airplanes other places.

 

[SlumTodd_Millionaire]

Yeah, it's the lease-back portion of your plan that concerns me. Far too many shady people running flight schools. Unless you know someone who owns one and you know him to be very trustworthy, I'd be wary. But buying a plane to do your training will usually come out far cheaper than renting.