How are hangar prices decided?

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rookie1255

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rookie1255
Private hangars at our small airport are $350 a month. A spot in the community hangar is $140. Not exactly cheap. Or maybe it is, since there's a wait list of months to a year for a hangar. How are these prices decided? If it was supply and demand then shouldn't prices keep increasing to the point where there's no wait list? If profit doesn't matter, then can we get super cheap hangar rent to help out the little guy?

Airport is county owned.
 
How: Price when more than one hangar remains un-rented minus $1
 
I wish how it worked is that every time a hangar becomes open/up for renewal it would go on a dutch auction to decide the monthly price. Say e.g. you have 10 hangars up for renewal in a particular quarter, then they go to the 10 highest bids.

Much more market driven. As it is right now we have places with lots of open hangars and places with 10 year waiting lists on hangars within 100 miles of each other. Both of those are incorrectly priced.
 
It appears to me every airport has their own way of determining hangar rent.

It is my observation that it is often unrelated to typical business practices.

The availability is often improved when hangars are not rented for non-aviation purposes.

In my experience I moved up the list several at a time because circumstances had changed for some on the list and when they were contacted they did not want the hangar or they did not want that particular hangar.

At my airport the hangers with the doors on the lee side of the hangar are preferred because they tend to be less dusty.

I recommend getting to know a hangar before accepting it.
 
Hangars on Tucson range from $295 - $375 depending upon where on the airport you are. I pay $295 for a a newish style with electricity and running water inside the hangar. There are others who pay $325 for electricity that isn't dependable because 4 or 5 hangars all use the same breaker and the water is 70 feet away from a bib sticking out of the ground. I have no idea how they price them, perhaps according to their rent?
 
Location plus square footage plus amount airplane is worth plus number of folks on waiting list divided by how much money the airport can squeeze out of someone wanting to rent a hanger.....
 
It absolutely is a function of supply demand plus location, location, location as has been mentioned. But also, there are other dynamics at play. I know airports that have waiting lists but priority is given to tie down tenants. So, basically they have two hangar waiting lists. One for folks who tie down at that airport and one for those who do not. So by having hangar prices set a little lower than pure supply & demand might dictate, they guarantee the hangars are always full and also they make their hangars look more attractive due to the lower rate. This along with the tie-down tenant policy will then encourage owners who want a hangar to tie down and pay the tie-down rent there rather than at another airport. Now, these tenants whether they be in a hangar or a tie-down need to buy fuel and possibly other services and most folks will buy where they are based. So basically, the lower hangar rent in conjunction with the policy regarding the waiting lists increase their overall customer base and therefore revenue. It's a pretty sound business model.
 
I know of one airport where there is zero relationship to supply / demand.

KMDQ said the following to me in the same conversation:

Me: "Wow, that's quite a waiting list. With that kind of demand, you'll be building more hangars, right"
KMDQ: "Oh, no. There's no money it. It would cost way more than we could ever make back."
Me: "What are current hangars renting for?"
KMDQ: "$185".
Me: "So increase the hangar rent until the waiting list drops to something reasonable. Heck, I'd gladly pay twice that to have my plane close."
KMDQ: "Oh no! We couldn't do that. Too many people wouldn't be able to afford it."

I find out later that (to absolutely no one's surprise), it's a good ole boys club. If you in it, you get a hangar. If you isn't, your name ain't never gone come up on that list...
 
Yes and the way you get into the club is to buy and airplane. All of sudden vacancies start opening up.
 
Funny you say that.

I was told that if I bought an airplane for sale on the field, it'd come with a hangar.

(I've owned a plane for years, still haven't gotten The Call.)
 
Mistake Not... said:
Me: "Wow, that's quite a waiting list. With that kind of demand, you'll be building more hangars, right"
KMDQ: "Oh, no. There's no money it. It would cost way more than we could ever make back."
Me: "What are current hangars renting for?"
KMDQ: "$185".
Me: "So increase the hangar rent until the waiting list drops to something reasonable. Heck, I'd gladly pay twice that to have my plane close."
KMDQ: "Oh no! We couldn't do that. Too many people wouldn't be able to afford it."
Click to expand...

I can feel your frustration level with that conversation from over here.

It's the same with our State Parks. They are simultaneously:

* So popular and scarce that if you don't reserve spots in the first few hours after they open reservations, you won't get in for that year.
-and-
* Scarce because they're under-staffed due to a lack of money, so some remain closed or partially closed.
-and
* They don't want to raise the rates because then people "can't afford them".
 
Both my current hangar(no electric, 1 hour away, but at an airport with an ILS) and my new hangar(electric I think, 30 seconds away, also an ILS) are both under $200/mo. The one 1 hour away I got with no waiting they tend to have a couple available at any time but have many hangars. The one near me has only 10 or so rental hangars(and a number of owned hangars on leased land) and it took me about a year. There was talk of adding more, but that seems to have fallen off the radar.

I'm glad they don't have the tie-down improves your position on the wait list rule here because it would be silly to have a tie-down that there's no way I'd park a plane at. There are pretty much 0 planes outside anywhere along the coast. I'd love to be picky and get to know the hangar, well, I don't care, I just want the plane close to home.
 
deonb said:
I wish how it worked is that every time a hangar becomes open/up for renewal it would go on a dutch auction to decide the monthly price. Say e.g. you have 10 hangars up for renewal in a particular quarter, then they go to the 10 highest bids.
Click to expand...

Potomac Airfield KVKX does it that way. Any new hangar goes on eBay.
 
weilke said:
Potomac Airfield KVKX does it that way. Any new hangar goes on eBay.
Click to expand...

I was just going to mention this. Basically whatever price you bit is the monthly price you pay. So now we have some folks paying $400 month and some folks paying $900 month, depending on how badly they want a hangar. Not a bad business decision. Of course the folks who bid up the price are often in the area temporarily so they don’t mind paying more.
 
weilke said:
Potomac Airfield KVKX does it that way. Any new hangar goes on eBay.
Click to expand...

Brad Z said:
I was just going to mention this. Basically whatever price you bit is the monthly price you pay. So now we have some folks paying $400 month and some folks paying $900 month, depending on how badly they want a hangar. Not a bad business decision. Of course the folks who bid up the price are often in the area temporarily so they don’t mind paying more.
Click to expand...

So what happens when the lease of someone who is paying a lower rent expires? What price can they renew at? Their old rate? The possibly much higher rate of the most recent auction winner? Or does their hangar automatically go up for bid at the end of the lease with no renewal provision?
 
rookie1255 said:
Private hangars at our small airport are $350 a month. A spot in the community hangar is $140. Not exactly cheap.
Click to expand...
Hangar prices vary immensely depending on location. You might think those rates are high, and there probably are cheaper places. But overall, those rates are pretty reasonable compared to other places I've been.

Heck, at MYF, an outdoor tie down (no covered shelter) runs $200.

Where I'm based (CPK) you can still find single engine T-hangars for $300-350/month, but the others start at $450-500 and go up from there.
 
Brad Z said:
I was just going to mention this. Basically whatever price you bit is the monthly price you pay. So now we have some folks paying $400 month and some folks paying $900 month, depending on how badly they want a hangar. Not a bad business decision. Of course the folks who bid up the price are often in the area temporarily so they don’t mind paying more.
Click to expand...

Who owns the hangars? If the airport sponsor owns them and they take grant money, couldn't they end up in trouble because the rates aren't equal for the various tenants?
 
mondtster said:
Who owns the hangars? If the airport sponsor owns them and they take grant money, couldn't they end up in trouble because the rates aren't equal for the various tenants?
Click to expand...
Not a NPIAS airport. No federal money. No grant assurances.
 
SkyDog58 said:
So what happens when the lease of someone who is paying a lower rent expires? What price can they renew at? Their old rate? The possibly much higher rate of the most recent auction winner? Or does their hangar automatically go up for bid at the end of the lease with no renewal provision?
Click to expand...
No lease, per se. I’ve been paying the same rate for seven years. If prices dropped I suppose I could bid on a cheaper hangar, but I don’t expect to see that happen.
 
Like everything else, it is decided by the Illuminati.


:p
 
Fearless Tower said:
Hangar prices vary immensely depending on location. You might think those rates are high, and there probably are cheaper places. But overall, those rates are pretty reasonable compared to other places I've been.

Heck, at MYF, an outdoor tie down (no covered shelter) runs $200.

Where I'm based (CPK) you can still find single engine T-hangars for $300-350/month, but the others start at $450-500 and go up from there.
Click to expand...

My hangar at MYF is $1000 /month. It is big but come on... I am on the wait list for the more reasonably priced city owned T hangars ($550-650 /month) but who knows when (if?) my number will be called.
 
RudyP said:
My hangar at MYF is $1000 /month. It is big but come on... I am on the wait list for the more reasonably priced city owned T hangars ($550-650 /month) but who knows when (if?) my number will be called.
Click to expand...
:eek::eek: $1000/month would pay for another pretty good plane.
 
SkyDog58 said:
So what happens when the lease of someone who is paying a lower rent expires? What price can they renew at? Their old rate? The possibly much higher rate of the most recent auction winner? Or does their hangar automatically go up for bid at the end of the lease with no renewal provision?
Click to expand...

The owner only started doing this a couple of years ago and the only time it seem to happen is when people move away or retire from flying.

There are upsides to outright ownership of an airport. His airport, his playground.
 
I paid $450 a month for my 182 in Atlanta at FTY in community hangar, moved it to Athens for my son and got a t-hangar for $360.00! It's all about location and supply and demand. There are a lot of hangars in Athens and I don't see many planes tied down outside.
 
Matthew K said:
:eek::eek: $1000/month would pay for another pretty good plane.
Click to expand...

Context is useful here. The aforementioned OP has an above median housing priced airplane, or whatever percentage of that value he finances on a recurring basis. In that context, spending 12K/yr in storage costs seems to retain proportionality. The problem is that, just like labor rates, storage rates don't adjust to account for hull value proportionality for the rest of the street.

Most piston single owners do not belong to the demographic our illustrious OP hails from, either in hull value nor yearly hours flown. But the hangar would cost a guy trying to stick a Warrior in there the same 12K. That's where the hobby just veers off to Mars for the lookin-thru-the-chain-link-fence crowd. Quite literally (and to borrow a phrase from Michael Moore): "I wanted to go to college, but I couldn't find parking, so I quit". :confused: It's a weird hobby alright.

paflyer said:
Or a house.
Click to expand...

Indeed.:D

To be clear, this has nothing to do with affordability; I wouldn't spend that kind of storage fee for my hull value as a matter of principle. Even if one did, it's difficult to foster enthusiasm to said outsider crowd when one has to downplay such egregious opportunity costs.
 
$487/mo at KRNO for a 45' manual door with an outlet for an engine heater. No idea how they arrive at the price... pick a silly price and add some more for good measure.
 
hindsight2020 said:
Context is useful here. The aforementioned OP has an above median housing priced airplane, or whatever percentage of that value he finances on a recurring basis. In that context, spending 12K/yr in storage costs seems to retain proportionality. The problem is that, just like labor rates, storage rates don't adjust to account for hull value proportionality for the rest of the street.
Click to expand...
Oh I agree, it is just really crazy to see a 1K a month hangar rate for me when in my location the cost is $100-150 max. Location makes one heck of a difference.
 
If you tie a plane down there, hang out at the airport and make friends with the manager, compliment his wife on her brownies, get involved in local politics to favor keeping the airport open, you MIGHT find yourself being offered an available hangar. Don't know if one has anything to do with the other though.
 
weilke said:
How: Price when more than one hangar remains un-rented minus $1
Click to expand...
I think he was asking how prices are actually calculated, not how they should be calculated. If your formula were followed, there would be few waiting lists and rents would be much higher. But then airplane ownership might decline and demand would fall and prices would follow. But this price fluctuation would begin a gradual, long term decline of prices and/or availability.
 
Rushie said:
If you tie a plane down there, hang out at the airport and make friends with the manager, compliment his wife on her brownies, get involved in local politics to favor keeping the airport open, you MIGHT find yourself being offered an available hangar. Don't know if one has anything to do with the other though.
Click to expand...

Fair points. This is probably why I'll never be a politician though, can't stomach being ingenuine.
 
JOhnH said:
I think he was asking how prices are actually calculated, not how they should be calculated. If your formula were followed, there would be few waiting lists and rents would be much higher. But then airplane ownership might decline and demand would fall and prices would follow. But this price fluctuation would begin a gradual, long term decline of prices and/or availability.
Click to expand...

Or people would get their ass in gear and build the number of hangars the local market can support. While I appreciated my $75/mo hangar rent, I did know that this was not sufficient to pay a note on a $60,000 building. While land on a public airport is 'free' to the sponsor, you still need to pay for the money it takes to put the metal box on it. Increasing hangar rents to market will do a number of beneficial things:
- get the folks to leave who use the hangar to store their RV/bass-boat/motorcycle parts opening hangars for aircraft
- make it attractive to build enough hangars in high demand locales
- eliminate waiting lists and get more 'active' aircraft to your field.

The downside is that you are going to displace a good number of 'nice guys' who provide unspecified goodwill type benefits to the airport.

Btw. There is a local airport for sale, comes with 100acres of 'light industrial' land. Has a hangar shortage and a long waiting list. If I was guaranteed to fetch the prices the guy at VKX gets with his auctions, it would make it worthwhile to buy the place for the potential hangar revenue alone.
 
rookie1255 said:
Private hangars at our small airport are $350 a month. A spot in the community hangar is $140. Not exactly cheap. Or maybe it is, since there's a wait list of months to a year for a hangar. How are these prices decided? If it was supply and demand then shouldn't prices keep increasing to the point where there's no wait list? If profit doesn't matter, then can we get super cheap hangar rent to help out the little guy?

Airport is county owned.
Click to expand...

The hangar rent supports the operating expenses of the airport. They can be set a any value the airport chooses to pay the operational costs of the airport.
 
weilke said:
Or people would get their ass in gear and build the number of hangars the local market can support. While I appreciated my $75/mo hangar rent, I did know that this was not sufficient to pay a note on a $60,000 building. While land on a public airport is 'free' to the sponsor, you still need to pay for the money it takes to put the metal box on it. Increasing hangar rents to market will do a number of beneficial things:
- get the folks to leave who use the hangar to store their RV/bass-boat/motorcycle parts opening hangars for aircraft
- make it attractive to build enough hangars in high demand locales
- eliminate waiting lists and get more 'active' aircraft to your field.

The downside is that you are going to displace a good number of 'nice guys' who provide unspecified goodwill type benefits to the airport.

Btw. There is a local airport for sale, comes with 100acres of 'light industrial' land. Has a hangar shortage and a long waiting list. If I was guaranteed to fetch the prices the guy at VKX gets with his auctions, it would make it worthwhile to buy the place for the potential hangar revenue alone.
Click to expand...

If it is so easy and there is so much demand, can we look forward to you getting off your ass and putting up some hangars?
 
Caramon13 said:
Fair points. This is probably why I'll never be a politician though, can't stomach being ingenuine.
Click to expand...

Not necessarily ingenuine if you are real friends with the manager because he's a fascinating old pilot and you aren't a politician but just work for the cause of keeping GA airports open and didn't start all this in the first place for the purpose of getting a hangar, and in fact were not even based at the airport when you started hanging out there. Moving the plane to a tie down might have helped though, but that might have been because you moved your home three hours away from your other base.
 
Rushie said:
Not necessarily ingenuine if you are real friends with the manager because he's a fascinating old pilot and you aren't a politician but just work for the cause of keeping GA airports open and didn't start all this in the first place for the purpose of getting a hangar, and in fact were not even based at the airport when you started hanging out there. Moving the plane to a tie down might have helped though, but that might have been because you moved your home three hours away from your other base.
Click to expand...

Yep I understand that, but your post led me to believe you were suggesting a "forced" relationship for personal gain.
 
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