To buy a plane or not?

Re: CFI and JOB should not go together!

I've often considered a blended approach to this...i.e. buy the ship, lease it to an FBO, fly it in the process of earning ratings there (and bore some sky holes too), instruct in it, and finally eventually sell it (or not). Like any sale-leaseback owner, I would bear the risk of the ship's potentially low rental usage in return for the reward of the ship's potentially high rental usage. I'd get to hedge the risk, however, by using it for my own ratings. In other words, in a regular sale-leaseback deal, I might lose $15K a year (if few rent the ship) or profit $15K a year (if many rent the ship). The fact that I'm using the ship for my own training, however, shifts the analysis so that even if I lose $15K, I'm still better off than I would have been as a pure renter, spending $25K for the same ratings. Your mileage may vary. Anybody else thought seriously of doing this -- to the point of actually trying to work real numbers?
 
Re: CFI and JOB should not go together!

Leasebacks are generally a losing proposition for the casual aircraft owner ...
 
Re: CFI and JOB should not go together!

I know...but isn't it because the casual owner doesn't get to hedge the risk (Not a rhetorical question...I really don't know)?
 
Re: CFI and JOB should not go together!

No ... usually it's because the terms ofthe lease favor the lessor far more than the lesee. I.E. Joe's Airplane shop sells Jon Doe an airplane and tells him they'll lease it back for Joe's Flight School. Problem is all maintancec must be done at Joe's, owner usually gets the tab for all maintenance problems (even if cased by the flight school ops) and even if you get through all that the airframe, engine, etc. all has more time one it than before and the owner didn't get to log that time.

Not saying all leasebacks are bad news but a lot of them are.
 
Re: CFI and JOB should not go together!

Thanks for all your insite guys. I appreciate everyones input on this post.
 
Re: CFI and JOB should not go together!

Right, that's the standard downside of the risk equation (which can be altered by bargaining power, negotiation, etc). But if you hedge against that with imputed income (i.e. the guaranteed benefit of not having to pay the hourly rental rate for the rest of your training) then that offsets (hedges against) the downside..it's just a question of how much. Just wondered if anyone had actually tried to run numbers, since it would blend the "buy the plane" and "CFI the plane" approaches.
 
Re: CFI and JOB should not go together!

Not to beat a dead horse, but I own 10% of a 1964 twin commanche. And I can tell you one thing it is not cheap, even owning 10%. Each engine TBO was $16,000, so I had to pay about $4000. The annual was about $13,000, so another $1300 of mine. Monthly it is cheap, but you need cash on hand to pay for repairs. So if you can swing it, go for it, I teach for the experience, and fly the "twinkie" for fun.
 
Re: CFI and JOB should not go together!

[ QUOTE ]
Right, that's the standard downside of the risk equation (which can be altered by bargaining power, negotiation, etc). But if you hedge against that with imputed income (i.e. the guaranteed benefit of not having to pay the hourly rental rate for the rest of your training) then that offsets (hedges against) the downside..it's just a question of how much. Just wondered if anyone had actually tried to run numbers, since it would blend the "buy the plane" and "CFI the plane" approaches.

[/ QUOTE ]

You're not guaranteed the benefit of not having to pay the hourly fee. Most lease backs charge you some fee to fly your own aircraft. Even if you get a good lease where you break even money wise, the aircraft is still worse for the wear and you're left holding the payment. The abuse most students do to aircraft and the mere fact that the airframe and engine are racking up hours that aren't going into the owner's pilot logbook are still huge obstacles to overcome.
 
Re: CFI and JOB should not go together!

[ QUOTE ]
Leasebacks are generally a losing proposition for the casual aircraft owner ...

[/ QUOTE ]

90% of the time this is true. I'd stay away from them, and wouldn't recomend them to anyone.

Somepeople get lucky, but the odds aren't in your favor.
 
Re: CFI and JOB should not go together!

I own a Cessna 152 with the 125 hp conversion. I love it and its cheap to run and maintain. I fly the crap out of it. 600 hours in the last 8 months plus other flying,i.e. multi engine! Best move I ever made. When you own a plane you seem to have more friends and the friends you have usually also have planes. I have friends that use my plane and they let me use theirs, it is a select group. My insurance allows me 4 other pilots on my policy without extra cost.

602 makes a good point on analyzing your expenses.

There is more to it than just flying. AD's alone can be a nightmare but it all depends on the aircraft and your situation. I'm only 24 and own it and I build time, fuel, maint. kitty and every thing for $12 an hour a person. Alone it runs me $24. Its not hard to find people to fly with when it only costs $12 an hour.
 
Re: CFI and JOB should not go together!

Sounds like I need to be on the other side of the equation...just buy the flight school.
 
Re: CFI and JOB should not go together!

wont it look better to have held a flying job instead of working like as a truck driver or at a clothing store while flying your own plane building hours?...

edited by Kristie: subject title edited back to original title
 
Re: CFI and JOB should not go together!

Maybe get a 135 certificate and make it all a "flying job" or something? This is all very interesting. My entrepeneurial streak is itching, I guess. lol

edited by Kristie: subject title edited back to original title
 
Re: CFI and JOB should not go together!

[ QUOTE ]
I own a Cessna 152 with the 125 hp conversion. I love it and its cheap to run and maintain.

Alone it runs me $24. Its not hard to find people to fly with when it only costs $12 an hour.

[/ QUOTE ]

People always look at me funny when I say that the C-152 is my favorite airplane. The only thing I would like better is a Cub.

The only problem is it's climb rate. The 125 hp conversion takes care of that.

It's really quick on the controlls. FUN!
smile.gif


Small you say? Open the window, and hang your arm out the window.

Slow, that just means you can see the stuff on the ground better.

The small panel just keep you from watching those silly instruments.

Cheap, that just means you can go flying more often.

They are redicusely simple to maintain.



There is a glider club nearby that has a C-150 with a 180 hp engine used for towing gliders. IT ROCKS!!

Stay away from the taildrager conversions though, the only plane touchier on the grond is a Pitts.
 
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