airplane as an investment..different take

I agree with both the above posts. There’s nothing like owning your own. But there are also financial realities. We’ve been fortunate enough to have been able to own without depriving our children of anything while growing up, but we aren’t rich, we had to budget. Maybe the kids could have had a bigger inheritance if we hadn’t had boats and planes, but what’s the point of life if you can’t enjoy it?
 
This thread has been a great read as I contemplate potential ownership in the next year or two (hopefully if the market settles down). I like the comment - the only thing worse than owning a boat is owning a plane. Yikes! I've owned boats for almost 30 years with the last one being a high performance cat and that thing definitely proved that renting would be better (from a financial standpoint). But like @pburger said - I owned it and could use it whenever I wanted however I wanted. I do understand where the OP is coming from though. I have already thrown a spreadsheet together just to see what the cost would look like compared to renting. Not so much to weigh whether it was cheaper to own or rent based on "x" number of hours in the sky but to understand what I might be getting into and if I felt that the result was realistic. I'm with a flying club right now and honestly, the availability of the aircraft is CRAZY good and taking them for days or a week at a time isn't a problem. Rates aren't bad, I think I'm right around $100/hr dry (insurance/hangar incl) on a 172. We also have a PA-28-182 and a C182. As I consider ownership, I'm looking for something that seats more than 4. I just found a Cherokee Six I can rent for not too bad of price ($200 wet) but the plane is 150nm away. I'm going to fly our 172 up there this Friday and go take the Six out with a CFI for a flight to check it out. So I will have options (for more seating), but not optimal (given its location). So back to ownership. I'd do it because I want to, not for an investment. Decide if the fun and flexibility to be had is worth it. Otherwise, join a club, rent from an FBO, and go fly. For me, the jury is still out. But if you ask my wife (she's seen my antics for MANY MANY years...) she'd probably tell you we'll be owning one in the next year or two. We shall see. Good luck OP. If you decide to do it, do it because you want to enjoy it, not because you're expecting a magic ROI to occur. After owning boats for so many years - I promise there are better investments for the sole purpose of making or saving money. But I have never regretted any of it due to the fun factor and pride of ownership that's resulted. Good luck!
 
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I don't think it makes sense to compare renting to owning because they're completely different types of flying — while there are some exceptions, renting usually means mostly local or day flights, with the occasional precarious long trip booked months in advance and then often canceled for maintenance, weather etc.

Owning is flying where you want, when you want. It's like the difference between owning a cottage with your own stuff that you can go to whenever you want, or renting one for a week every summer. I don't know many renters who kept flying for more than a few years before they got bored and quit, unless they went on to become instructors, mechanics, etc.

A far better comparison would be between sole ownership and a partnership. Those are similar types of flying, and both keep people engaged for years or decades.
 
As a landlord, I hate renting things. I'm a control freak and I knowing where the machine was when it was shut down. Bought a Cherokee 180 for low 30's six months ago. Put in 4k for radio repair and adsb. Would like to put in carpet and possibly interior. The paint and the leather interior don't match at all. A shame since the leather is in great shape. May see if the local upholstery guys can dye it.
 
gov98 said:
Lot of Afghan's right now wish they had had a plane on Friday of last week and a local GA airport to fly from. It may not be a winning financial investment... but I can tell you this much, a fully fueled GA aircraft can take you from one part of the country to another quicker than any other form of transport and in a way that even roving bands of warlords will have a hard time intercepting. You may not be getting a return on your investment, but in my mind it is VERY CHEAP black swan bugout insurance with tangible side benefits in regular usage.
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Don't forget the Zombie Apocalypse.
 
gov98 said:
Lot of Afghan's right now wish they had had a plane on Friday of last week and a local GA airport to fly from. It may not be a winning financial investment... but I can tell you this much, a fully fueled GA aircraft can take you from one part of the country to another quicker than any other form of transport and in a way that even roving bands of warlords will have a hard time intercepting. You may not be getting a return on your investment, but in my mind it is VERY CHEAP black swan bugout insurance with tangible side benefits in regular usage.
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Yeah, forget that it's fun... I've flushed a lot of money on dumb things for entertainment.
 
I"ve posted this before, but it bears repeating. One of the first years of ownership I set up a spreadsheet to carefully calculate everything I spent on aviation that year. I then deleted it and never did such a thing again. How long do I have to live? 20 years? 25 perhaps? And for how much that am I going to be able to do what I want? While I can do what I want I'll do what I want, money be damned. I'm not cutting into our retirement and we can still eat and pay the mortgage. Good enough for me. I don't want to be in my dotage saying "gee I wish I'd have". Can't spend money when you're dead.
 
Anyone who uses the words airplane and investment in the same sentence needs to be in therapy!
 
Richard G. said:
Hello Everyone,

***DELETIA***

Over the years GA aircraft have not gotten cheaper, sure there have been increases and decreases in the market, but over the last 30 years, the certified GA aircraft pool continues to get smaller because of accidents, planes deteriorating etc. So the prices in general will always trend up, or at least stay the same.

***DELETIA***

What are your thoughts?
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Airplane as an investment such as stocks, money market, real estate? Bad choice. Real Bad Choice (tm).

Investment in an asset you own at your beck and call that YOU can use to follow your dream/avocation to commit aviation, gain experience, upgrade your ratings and skills on your schedule? Yup.

Investment in participating in activities and events that please you? Yup.

Investment in an asset that you've earned through your career successes and can afford to keep up? Yup.

Bragging rights? Hey, why not? There is a certain pride of ownership and cool factor in walking out to YOUR airplane and launching off to parts unknown by the great unwashed while the renters are standing in line to check out a school/fbo beater for an hour.

Purchasing an airplane is 1) a personal decision, 2) just the start in the number of checks consisting of multiple AMUs (aviation monetary units...1 AMU=$1K USD) you're going to write, and 3) something only YOU can decide is worth the expense after taking care of necessary things (family, food, shelter, utilities, insurance, vacations, etc), and 3) in the general scheme of things, if you're not using it to support customers or further your business, can not be justified by any logic other than "I want to own an airplane and am willing to make the adjustments in my life and financial position to allow me to do so."

But purchasing to generate a capital gain? That brings to mind the old saw "if you want to make a small fortune in aviation, start with a large fortune"

(and this is speaking from experience having owned a number of planes from simple 4-seat to a Malibu...none of them sold for less than I paid for them, but I made $0.00 profit on the plane itself; in fact, probably lost $$ when factoring in all the ancilliary expenses...but the experiences I gained can not be quantified in plain folding money...)

Good luck in whatever path you choose. But go into it with your eyes wide open and a clear mind as to what you want to do.
 
The pool of GA AC is not shrinking. Cirrus is pitmping out AC faster than the old 172s die. A used SR20/22 is not that much for an older airframe.

The ticket is E/AB. Vans builders alone add 150+ AC a year. And there are now so many easy ways to get into a new E/AB like factory assist it simply pay a builder that you can get into a good AC for Less than 100k.
 
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There are a ton of unknowns and assumptions you have to make in a spreadsheet to see if owning is a better deal than renting. You can call it an “investment” but what you’re really doing is deciding how to get what you want out of flying for an amount you’re willing to pay. Change assumptions like overhaul cost, rental price, 100LL cost, etc, and you can make pretty much anything make sense at pretty much any yearly usage.

Just don’t try to compare airplanes with other normal investments. Liquidity of an airplane changes. Prices fluctuate. ADs get issued.

Fly airplanes. Have fun. Save money on other things.
 
Rented for 28 years. Have owned for 2. Would not go back, except for training.

Having said that, I disagree with the argument that life is short, so spend your money. Life can be quite long. Buying everything you want NOW can be gratifying in the short run. But in the long run, saving and investing early will put you in a position where you can have what you want with surplus funds, while still achieving financial security. While I was renting for 28 years, I was also maxing out my 401k and IRA's. Compound growth is a wondrous thing.
 
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Richard G. said:
I agree with everyone 100% that the whole expenses of owning an airplane is a losing situation financially. I agree with you.

I guess let me try this a different way,
I currently spend $135 an hour to rent a 172. I have to fight plane availability all the time and I think it would be impossible for me to rent this plane for a length of time for a trip. There is a $165 an hour 172 in the area that has a glass panel and more availability, but more money, same slow airplane. The next step up is an SR22 and thats $225 an hour. So lets just for discussions sake say I rent the $165 an hour 172 for 30 hours a year, and the $135 172 for 50 hours a year, thats $11,700 I'm going to be spending a year weather I own a plane or not.

If the capital expense of the airplane was say $100,000 and I could buy that up front with cash(I know easy money these days use someone elses money but for discussions sake) for a 182 or similar, then all I have is the hangar/annual/fuel/insurance costs. My area hangar is not expensive(central Arkansas) so I'm lucky there.

So, lets say 5 years into this deal, renting, I have spent $58,500. Owning I spend potentially more than that $58,500, but probably a lot more flying hours, more enjoyment, more flexibility, and a faster aircraft. I can also still probably sell the airplane for the $100,000 I paid for it, a $10,000 gain or loss is not a big deal, that is how I'm looking at the aircraft as an "investment" probably won't make money, but, if I'm going to spend that money renting or owning and the biggest difference is the capital outlay up front, then doesn't it make more sense to own not from the financial sense, but from the enjoyment sense?

Sorry if I'm all over the place, I guess I'm just trying in my head and here to talk through justifying aircraft ownership vs just renting, and it may not be possible from a financial sense.
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Simply stop.

Either you want a plane or you don't.

Single ownership gets around the scheduling issues and use cases.

You'll never work the numbers to justify the end.
 
1000RR said:
I'm with a flying club right now and honestly, the availability of the aircraft is CRAZY good and taking them for days or a week at a time isn't a problem.
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A well run club is a fantastic way to go. So is a partnership. Both are middle ground between rental and full ownership.
 
Ed Haywood said:
A well run club is a fantastic way to go. So is a partnership. Both are middle ground between rental and full ownership.
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I've definitely enjoyed the club so far Ed. I just took a look at our 3 planes' schedules all the way out to January - no reservations at all. One thing that is limiting though is we have nothing with more than 4 seats (which is fine most of the time). So with me recently finding a Cherokee Six that I can rent (thanks to a POA member), that may be a stop gap for when I need/want it. Unfortunately it's about 150nm away, so I'd end up flying a club plane to get it and then use it for a trip or whatever (which I'm actually doing tomorrow to go fly it and check it out). Not ideal by any means. So I'll be looking at the ownership route and weighing the pros/cons/cost of that as well. My neighbor is a commercial pilot so if I could talk him into going in halves on a plane, that could be a consideration. Outside of that, I think I'd be meeting up with a stranger and hoping for the best and at that point, I would heavily lean towards just buying one solo.
 
Ed Haywood said:
Rented for 28 years. Have owned for 2. Would not go back, except for training.

Having said that, I disagree with the argument that life is short, so spend your money. Life can be quite long. Buying everything you want NOW can be gratifying in the short run. But in the long run, saving and investing early will put you in a position where you can have what you want with surplus funds, while still achieving financial security. While I was renting for 28 years, I was also maxing out my 401k and IRA's. Compound growth is a wondrous thing.
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It’s a good idea to put yourself into your own shoes and imagine when you are in your 80s and 90s. The reality is, money makes a big difference in quality of life. Fail to plan for that and you can be quite miserable in your old age. At the same time you have to also enjoy the present. You need to try to take care of both of the yous.

It’s like the Seinfeld episode when he says nighttime Jerry screws over next morning Jerry. Only you have to look farther into the future.

 
Rgbeard said:
Simply stop.

Either you want a plane or you don't.

Single ownership gets around the scheduling issues and use cases.

You'll never work the numbers to justify the end.
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^^^ This. Great way to put it.

The way my wife and I decided was this:

Do we want a plane? Yes

Can we afford a plane? Yes

So we bought a plane.

We use our plane mainly for travel. Sure, for some trips, we beat the airlines door-to-door, and for some trips we are cheaper than the airlines. Will we ever break even on the plane? Heck no. So what? Buying a plane is primarily an emotional decison. The "can we afford it" question must be asked and answered, but spreadsheets don't do much for the emotional part.
 
If purchasing a relatively simple, used aircraft the typical age of the GA fleet (about 30-40 years old now), you will likely spend FAR more on operation, maintenance, and upgrades than on the purchase price. MANY times over if you own it for a while. As investments go, owning an airplane has enormous negative earnings value. Don't even go there. I purchased both of my planes for less than what it would cost to purchase a new automobile at the time. Each major upgrade to those planes (engine, avionics, etc.) typically cost an equivalent or more of the original purchase price. The biggest fallacy is that owning an airplane will save you money, especially one you can fly IFR safely. Ownership is all about convenience and safety. If you own a plane, you have it anytime you want, and you know what condition it is in. If you have the financial means, and enjoy flying, then go for it and don't look back. If you are worried about where you will find every penny you will need to spend on the plane, then ownership is not for you. A flying club is an intermediate option between renting and full ownership, but comes with its own dynamics and limitations. Nothing beats full ownership.

For 500 nm trips a simple light single is reasonably affordable and capable. I own an AA-5 Traveler and a 200-500 nm trip is kind of the sweet spot for flying yourself instead of driving or taking an airliner. Flying yourself will usually beat either option by a pretty wide margin. My wife saw the GA light when she realized we could fly to DC or Maine in 2-3 hours instead of a 7-10 hour drive. Of course, you have to realize you you never have the dispatch reliability of an airline or your automobile, but then again you won't normally lose your own luggage, either...
 
I hate money:

Travel - two SEL airplanes / large hanger - I could not think of a more expensive way to travel if I tried.
Meat - Bow hunt - the most expensive way to put food on the table you could ever think of.
Bass Fishing - $70K boat and I throw the Bass back - don't even eat them. How do you even calculate a ROI on that?

This is why I might never be able to retire, but I enjoy my business and I enjoy flying, hunting, and fishing.

Life is all about making choices.
 
Richard G. said:
I agree with everyone 100% that the whole expenses of owning an airplane is a losing situation financially. I agree with you.

I guess let me try this a different way,
I currently spend $135 an hour to rent a 172. I have to fight plane availability all the time and I think it would be impossible for me to rent this plane for a length of time for a trip. There is a $165 an hour 172 in the area that has a glass panel and more availability, but more money, same slow airplane. The next step up is an SR22 and thats $225 an hour. So lets just for discussions sake say I rent the $165 an hour 172 for 30 hours a year, and the $135 172 for 50 hours a year, thats $11,700 I'm going to be spending a year weather I own a plane or not.

If the capital expense of the airplane was say $100,000 and I could buy that up front with cash(I know easy money these days use someone elses money but for discussions sake) for a 182 or similar, then all I have is the hangar/annual/fuel/insurance costs. My area hangar is not expensive(central Arkansas) so I'm lucky there.

So, lets say 5 years into this deal, renting, I have spent $58,500. Owning I spend potentially more than that $58,500, but probably a lot more flying hours, more enjoyment, more flexibility, and a faster aircraft. I can also still probably sell the airplane for the $100,000 I paid for it, a $10,000 gain or loss is not a big deal, that is how I'm looking at the aircraft as an "investment" probably won't make money, but, if I'm going to spend that money renting or owning and the biggest difference is the capital outlay up front, then doesn't it make more sense to own not from the financial sense, but from the enjoyment sense?

Sorry if I'm all over the place, I guess I'm just trying in my head and here to talk through justifying aircraft ownership vs just renting, and it may not be possible from a financial sense.
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Where are you located? Those rates seem awfully familiar.

Sent from my SM-G950U using Tapatalk
 
Partnerships are indeed a very good way to go. A fellow contacted me from Facebook interested in a partnership in the Mooney. Best thing I ever did. He's a better pilot than me (who isn't?) and an awesome mechanic who helps me keep the Mooney in ship shape. He's become a good friend and I'm really happy I brought him aboard. Oh, and all my expenses have halved and I still mostly fly whenever I want.
 
steingar said:
Partnerships are indeed a very good way to go. A fellow contacted me from Facebook interested in a partnership in the Mooney. Best thing I ever did. He's a better pilot than me (who isn't?) and an awesome mechanic who helps me keep the Mooney in ship shape. He's become a good friend and I'm really happy I brought him aboard. Oh, and all my expenses have halved and I still mostly fly whenever I want.
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Well there ya go. There’s another thread around here where it seems the partnership wasn’t such a good idea. There’s no one size fits all answer. It all depends.
 
Owning vs Renting... ok, I just figured out my own analogy since I like to go diving. [and btw, I'm in a similar boat of considering my first purchase of a plane] If you go buy your own dive gear (BC/Regs/Tanks/Wts/Wetsuit/Fins/Mask/etc.) you know exactly when the last maintenance was done, who did it, the condition of your gear, that everything fits, you're familiar with the operation, and you know who pee'd in the wetsuit last. If you rent, much of that goes out the window, but you didn't have the initial purchase of the gear, the maintenance costs/headaches, the surprises, etc. If you take the price you paid for all your dive gear, you could do a LOT of renting gear and go dive plenty. So for the convenience of it all, maybe you want to be familiar with all your own gear and know who pee'd in your wetsuit last - go buy a plane!
 
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