Is an airplane a good investment?

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evapilotaz

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Hello fellow aviators.

I don't mean make money from a sale of an airplane but do you get most of your money back what you have put into it.

Example.

I purchased a $60k Cessna 182 with 300 hours on Motor. Over Three years I put 300hrs on said airplane including $10,000 in avionics upgrades. How much does that engine time depreciate the sales price when I go sell the airplane? I know this is a numbers game but just trying to get a feel for the market. Let also assume the airplane just had annual completed and nothing else is wrong with it.
 
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evapilotaz said:
Hello fellow aviators.

I don't mean make money from a sale of an airplane but do you get most of your money back what you have put into it.

Example.

I purchased a $60k Cessna 182 with 300 hours on Motor. Over Three years I put 300hrs on said airplane including $2,000 in avionics upgrades. How much does that engine time depreciate the sales price when I go sell the airplane? I know this is a numbers game but just trying to get a feel for the market. Let also assume the airplane just had annual completed and nothing else is wrong with it.
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What avionics can be upgraded for $2k installed on a certified airplane?
 
Avionics upgrades work like putting a new roof on a house. Costs plenty but doesn't add much value because everyone expects a house to have a functioning roof. If nothing blows up you can usually get close to purchase price, less maintenance and operating costs. Maybe. Not an investment, but with a little luck you won't lose as much as any other motorised toy. More then most things tied up though. Simply don't buy more airplane then you can afford to walk away from and you will have a more relaxed ownership experience. Or buy a P51 they always go up in value...
 
evapilotaz said:
bnt83 said:
What avionics can be upgraded for $2k installed on a certified airplane?
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I replaced the Knob on the Comm 1 with a better knob.
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I literally LOLed here. :D That is a good one! :)

Frankly, your airplane sale price is first subject to market fluctuation and supply/demand.
A good engine with low hours adds value (or you can argue that it does not subtract value). 300 vs 600 hours won't be a big difference in sale price. Once you get past 1/2 TBO, people usually start looking elsewhere. Everybody wants a fresh engine nowadays.
Just my $0.02;
 
They can be a good investment, but you got to get the right airframe for the right price, for a super common plane like a 182 you need to almost steal it.

For a good investment I'd find a deal on a PA18, C180/185, Pitts, 7ECA, etc. Airframes like that seem to always command a good price.

Only way I'd consider a 182 a good investment is if I leased it dirt cheap and chucked tandems out the back at $199 a pop.
 
Airplanes are a better investment than most other motorized toys, IMO. But, since they are considered to be a luxury item and the market is not huge, market prices can fluctuate pretty drastically (like during the last stock market crash). Just like buying any other piece of equipment, you need to do your homework in picking a unit that does have good value on resale and a reasonably active market.

Ownership(vs renting) gives you 24x7x365 access to the airplane, the ability to pick a more capable and fun machine, the ability to park it in spot more convenient to you, and relatively low per/hour variable operations costs (but higher fixed costs... :)) These are advantages that are hard to give up, once you become accustomed to them.

Like all motorized toys, the wise and practical thing is to save the money instead, but where's the fun in that?
 
I sold mine for what I bought it for, but if you add the sales tax and all the maintenance in between...
 
The good news is, airplanes depreciate much differently than cars. The model year doesn't often make much of a difference in value and +/- about 1,000 hours doesn't seem to alter the value, either. Major selling points are recent major overhauls, recent prop overhauls and fresh annuals.

If you don't take care of your airplane, that's a different story. It's safe to say most aircraft parts cost exponentially more than a similar auto part just because it has the word "airplane" on the box. If you let the carpet get greasy or the seats torn, it'll cost an arm and a leg for a prospective buyer to fix. That's a big negative because it's not something the buyer has to fix, whereas an engine overhaul is going to happen one way or another on every single airplane.

Hopefully I'm making sense here. But to answer your question, yes, an airplane is a good investment if you take care of it and upgrade wisely (like what Phoenix said).
 
edo2000 said:
...., the wise and practical thing is to save the money instead, but where's the fun in that?
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I disagree, between inflation and all the dumb stuff happening in the market lots of other places I'd rather put my money outside from currency which changes value based on how many times the government hits the print button.

One thing you can do aviation wise is buy working airplanes, do it right and a plane should at least hedge inflation.

Besides, end of the day life is short and the amount of fun memories you can have in a plane far outweigh all the fun family memories I've had with anyone in the lobby of a bank or investment office.
 
I know someone that bought a Cessna 172 in 1999, a new one for $150,000 and sold it 10 years later for $120,000 after putting 1000 hours on it. He had to spend $75,000 on the hangar, insurance, maintenance and fuel. About how its been going. Figure $30 an hour in depreciation. Its ballpark and about as good as anyone can predict.
 
My dad bought a 172RG for 50k, sold it 5 years later for 75k. Basically flew for free.
 
James331 said:
I disagree...
..... Besides, end of the day life is short and the amount of fun memories you can have in a plane far outweigh all the fun family memories I've had with anyone in the lobby of a bank or investment office.
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I agree completely. Putting frugality above fun your whole life makes for a very dull life. I wouldn't recommend it.

I have seen excellent appreciation on several aircraft over the years. I recently sold (my 50% of) a C185 that I bought in 1983 for $36K. The 2015 price was $132K. Not a bad investment.
 
Buy one that looks like crap and spend about a hundred hours polishing and detailing it then fly it to Oshkosh and win an award.

That'll do it. :)




 
Very few planes you will not loose on. You WILL loose money in upgrades. End of story. Some planes are bottomed out like a C150, older Cherokees, and Bo's from the late 40's early 50's. You can buy a C150, fly it 500 hours and sell it for exactly what you paid.

Id rough it out and say you will recover .60 cents on the dollar if you put money in the stack, paint or interior.
 
Did it come with the wingtip recogs?


Unit74 said:
Very few planes you will not loose on. You WILL loose money in upgrades. End of story. Some planes are bottomed out like a C150, older Cherokees, and Bo's from the late 40's early 50's. You can buy a C150, fly it 500 hours and sell it for exactly what you paid.

Id rough it out and say you will recover .60 cents on the dollar if you put money in the stack, paint or interior.
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Hence why you buy a plane more or less done, never do major upgrades on a certified planes panel etc.

Upholstery and light cosmetics, OK
A WAAS upgrade OK.

Much outside of that, no bueno

Still a PA-18 or skywagon is going to be a little different than a 172 or a PA28 type plane.
 
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James331 said:
Did it come with the wingtip recogs?




Hence why you buy a plane more or less done, never do major upgrades on a certified planes panel etc.

Upholstery and light cosmetics, OK
A WAAS upgrade OK.

Much outside of that, no bueno

Still a PA-18 or skywagon is going to be a little different than a 172 or a PA28 type plane.
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H.I.D. wigwags went on when the Sportsman cuff was installed.

Truth be known, I've put maybe thirty grand into it above the purchase price.

430W
S-TEC 30 GPSS w/A/P
Intercom system (4 place)
New panel plastic
All guages sent off reworked with new bright numbers and faces
Light rings around all guages on rheostat
Sportsman cuff
Wig wags
Extended baggage (custom with polished floor)
New uphostery with lambswool skins and memory foam
New headliner, carpet, Selkirk plastic body panels
Door Stewards
AOA
MT prop and spinner
Heavy guage concentric tailwheel springs
And a partridge in a pear tree ...

And a lot of GD polishing. :lol:



I'll never get all my money back and I don't care.
 
txflyer said:
Buy one that looks like crap and spend about a hundred hours polishing and detailing it then fly it to Oshkosh and win an award.

That'll do it. :)
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Beautiful 180! Definitely brightened up this thread. :)
 
txflyer said:
H.I.D. wigwags went on when the Sportsman cuff was installed.

Truth be known, I've put maybe thirty grand into it above the purchase price.

430W
S-TEC 30 GPSS w/A/P
Intercom system (4 place)
New panel plastic
All guages sent off reworked with new bright numbers and faces
Light rings around all guages on rheostat
Sportsman cuff
Wig wags
Extended baggage (custom with polished floor)
New uphostery with lambswool skins and memory foam
New headliner, carpet, Selkirk plastic body panels
Door Stewards
AOA
MT prop and spinner
Heavy guage concentric tailwheel springs
And a partridge in a pear tree ...

And a lot of GD polishing. :lol:



I'll never get all my money back and I don't care.
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Looks like a well thought out plane and a good IFR ship too
 
All upgrades are losses. I can't think of any real world exceptions to that rule.

But if you have to do upgrades; interior, paint or avionics are the "least" bad. It's like selling a house. People buy with their eyes and they want shiny new bling and newness. The worst upgrades are engines or mechanical stuff that can't be seen. Overhauls cost twice as much as they quoted before it's in and out, and you get a quarter of it back. Ask me how I know. :thumbsup:
 
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So, you would like to keep some value of the money you invest into an airplane.

... Pardon me, going for a second glass of wine...

... Ok, back now ....

The best advice I've seen on any forum was some cranky dude over on the red board that basically said: go to the bank and withdraw a few hundred dollars. Then set it on fire. If you are ok with that then you are ready to buy an airplane.

Right now I'm looking to visit some guy about fixing an issue with my garmin 430. That will trigger an upgrade to the 430w. Since he is opening up the panel, why not just add in the gdl 88 for ads-b and the 2020 requirement? Who cares what I paid for this thing or get out of it when I sell, I'm getting soaked RIGHT NOW! (I'm looking at about $10k right there!)

... Wait, glass empty... Be right back ...

... I'm back. Regardless, owning an airplane is pretty cool.

Thank you sir. May I have another ??
 
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I wouldn't expect to get that $10K back....:no:

now....your base investment is still good. :yes:
 
Ok I get it folks. It's more of trying to convince myself and wife I would get most of our money back from the initial purchase. Upgrades and cosmetic stuff not so much.
 
Checkout_my_Six said:
I wouldn't expect to get that $10K back....:no:

now....your base investment is still good. :yes:
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Base investment? That sounds like gambler math, totaling up all the wins despite a net loss. It was great I won 50 grand, hey man can you get lunch I'm little short til next paycheck?:lol:
 
evapilotaz said:
Ok I get it folks. It's more of trying to convince myself and wife I would get most of our money back from the initial purchase. Upgrades and cosmetic stuff not so much.
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Convince yourself, straight up lie to the wife.:lol:
 
I cringe every time I hand over a credit card to pay for that rental. I rather spend the money on my own wings even if it's costing me per flight hour. There is nothing compared to the pride of ownership.
 
evapilotaz said:
Ok I get it folks. It's more of trying to convince myself and wife I would get most of our money back from the initial purchase. Upgrades and cosmetic stuff not so much.
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Buy an older plane thats common, has a good market, is already depreciated out, and has been well maintained. There is a very good chance you can fly it for a few years without spending more than regular annuals and fixing some minor stuff, then sell it for around what you paid for it.

By depreciated out, I mean look at the market and you'll notice that no one cares if its a 1986 cessna or a 1991 cessna, you are buying based on mechanical condition, cosmetic condition and avionics.
 
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It is "possible" to not lose money on aircraft, but it takes a lot of work and the right buy. I've done that once, sold another for basically exactly what I had in it.
 
brian];2008590 said:
The best advice I've seen on any forum was some cranky dude over on the red board that basically said: go to the bank and withdraw a few hundred dollars. Then set it on fire. If you are ok with that then you are ready to buy an airplane.
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Yep.

Since June I've spent about $30,000 on my airplane on top of the purchase price.

I didn't buy it as in investment:rofl:
 
stratobee said:
Overhauls cost twice as much as they quoted before it's in and out, and you get a quarter of it back. Ask me how I know. :thumbsup:
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They don't have to be, if you go with the right shop and don't try to get a 'bargain'.
 
The way I look at it, I want a return on investment, not (necessarily) appreciation in market value.
That basically means that whatever money I invest in the plane or my flying has to feel worth the cost.
And sure, buying your own plane is a terrific investment in that sense, as long as you plan to keep on flying.
 
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