Buying an Airplane . . . an Investment?

[cookmg]

Hello Everyone.

If you bought a used 172 and leased it to a flight school or flying club, could you profit off the airplane? (Consider if you did not need to make loan payments -- no interest) All things considered, how often would you need it to fly?

Do used 172s appreciate in value still? Is the appreciation considerable? How might the actual costs of operation compare to the rental rate you could charge in a flying club?

Are there any interent resources that can help me evaluate whether or not buying an airplane could be profitable, or atleast pay for itself?

Thanks so much.

Mike

Also, say for a 40,000 dolllar aircraft, how much cash should you have immediately available as a maintanence reserve?

 

[azpilot]

Generally I don't think leasebacks are a good idea. I think there are some old messages on this, do a search.

Why are they bad?
- Students will use and abuse your aircraft inside and out
- Your insurance will be much higher
- You may lose control of when you want to fly your airplane

Sorry that I don't have more detailed opinions for you. I know lots of people who have tried the leaseback route and have changed their minds. A friend of mine had a Cardinal on leaseback years ok. A mechanic signed off on some work which included an oil change. On the first flight after the work was done the oil pressure went to zero after take-off and my friend had to make an emergency landing. The work was done improperly and this was not something that would have been noticed pre-flight. (I believe the drain plug was not installed all the way) My friend made it back safely but the engine was toast. The school tried to lay the blame on him for an improper pre-flight inspection. To make a long story short the had to threaten the flight school with a law suit before the school agreed to pay for the repairs.

Eventually the school bought the plane from them.

It's this kind of crap that I am talking about....

If you want to own a plane go for it. Fly it lots and be prepared for stuff to break.

Most aircraft tend to retain their value so if you buy it for X you should be able to sell it for X down the road minus what you have spent on repairs, interest, etc.

- AZPilot

 

[310]

don't go the lease back way- I did it with a single- alot of cash flow- but both ways- just wore out the plane faster- if you want to own, do it after some homework- check into recurring ADs etc and buy and fly it yourself only. Alot less mx surprises that way.

 

[DruDown]

Flight school leasebacks will only cost you more in the end, with 100hr inspections, increased wear and tear, student solos, etc.

There are several resources out there to help alleviate the cost burden. One such way I am a fan of, is co-ownership or fractional ownership. MyPlane.com is a great site offering ways to own fractions of GA aircraft, thus dividing up the costs and maintenance. Just do your research on the others you will be owning the airplane with.