As Kent said, you are leaving a lot of the cost out of the picture (e.g. asset carrying cost, unscheduled maintenance, true engine reserve) and if included, I doubt the picture would be very black. I understand that your arrangement is working for you (and agree that a good 3-4 person partnership is generally the least expensive way to fly as long as the plane gets used 100-150 hours per year), but for anyone considering such ownership for the first time, I think it's important to understand the true total cost and your example seems misleading.
There's also the type of airplane to consider here. When you rent a 2-4 year old airplane for $120+/hr your rent is offsetting more depreciation than any single other expense. Sharing a significantly less expensive older plane and handling as much of the maintenance as possible could certainly lead to cheaper flying hours, but unless you are talking Champ or Cub class there's just no way to keep the total cost in the $35/hr range IMO. Even on an older Skyhawk, there's vacuum pumps, flight instruments, radios, alternators, batteries, props, paint, glass, and interior to pay for if you stay in the game long enough. One thing I have seen done is to change planes often enough that you can just let such things wear out without doing anything about it, so long as you are lucky enough to buy in at an attractive price and sell without a loss, but that seems a lot like rolling the dice pretty often to me.
Everyone makes their own choices. But as I said, this is a 20+ year old partnership, and we have not had the problems you refer to. We have been able to pay for anything that needed to be done. When that is not the case we will increase the monthly or make an assessment on the partners. Were have a 20 SMOH engine, and a 20 SNEW prop, and just about anything under the cowl was replaced with the engine work. Paint was done about 10 years ago and is still great, since we keep it hangared. We do not just let stuff wear out. The only area where we do not accumulate enough is the engine reserve, and that is intentional. We could charge $10/hour from the first hour, and in a 2000 TBO we would accumulate $20,000 for an OH. Instead we elected to just keep the engine use "even" by charging only for hours over 30. That does a few things for us.
First, it encourages partners to fly at least 20 or 30 hours/year, which is good for the plane and good for their skill level. Unfortunately, some of the partners have not been able to fly that much, and one is talking about selling.
Second, it makes the partnership affordable. Most of us expect to sell our share before the next engine work is needed, so paying in to an engine fund would be for the benefit of some future partners. We will "pay" for this decision when we sell our share because the share price will be based on the plane value at that point divided by 4, plus 25% of the partnership account (which will not have a lot of engine money). But that is fine with us. We will still sell for more than we paid for it, since the plane has continued to appreciate faster than the engine repair costs would accumulate.
Third, it eliminates the need to keep current on the overhaul cost for our engine, and update the hourly rate. When we priced the recent OH, we found a wide range of prices, options, warranty coverage, etc. etc. We just picked a number ($10) and until something changes - like a change in 2 or more of the partners who want to do it different - that will work just fine for us for the next 10 - 15 years.
Four, when engine work is needed (as it finally was recently) the partners who are active at that time are the ones who will pay for the OH, and they are also the ones who will most benefit from having a fresh engine in the plane. That is how we feel about the work that was just done. We pay our $3000 each, the plane is suddenly worth more than it was and our share is worth more by just about that much, and we are the ones who benefit from the fresh engine.
So, at this point a buyer will get a 25% share of a low time engine and prop, and a good plane. The price will reflect that.
In 10 years a buyer will get a 25% share of a mid-time engine, and a good plane. The price will reflect that, and the expected appreciatiation of the plane in that time.
We still expect to get our investment back in 10 years, and a little more. All an engine reserve charge would do, if started the first hour; is make each flight a little more expensive, and increase the value of the share when we sell. We run a risk of an unexpected engine repair, which is one reason we wanted a 5 year warranty. Worst case, with 4 partners, we each have to pay 25% for a OH early. But in that case the partners who are active at that time are the ones that pay for the OH, and the ones that benefit from having a fresh engine when the work is done.
I will put it another way. Do you put $200 in a fund for every 1000 miles you drive your car, so you will have $20,000 in the bank when you get to 100,000 miles so you can replace it? I don't. When it is time to replace the car I replace the car. We just do the engine reserve the same way, with a little adjustment for the higher use pilots.
. my wife and I partnered up in an old 172 then had our first child. Just like N141PF said it is a no frills plane but get us where we want to go. So far (and I am hesitant to say that because she is going in for her annual on Monday) it has not drained the bank account. I didn't see much change in our life style but we are not high maintenance people to have an impact.
Don't understand this. As I pointed out, my cost is $100/month plus fuel. I am not counting the buy-in price at all if that is what you mean. For each hour of flying I pay about $30-35 for fuel, so for 2 hours/month it is a total of $170. Renting is running about $100/hour wet here, so I am actually ahead a few bucks. If I were on my own, instead of with 3 partners, you would be right. As it is, we split the fixed cost 4 ways, and buy our own fuel. Perhaps you did not understand I was talking about a 25% partnership share (up a post or two), and not a solo ownership...
