Is owning an airplane worth it?

[rachelk.tailwinds]

Ownership is without-a-doubt, better than renting. It's not like you're throwing your cash away with a purchase, you'll likely get something back out of it when you go to sell again.

If you really want it to feel like an investment, look into lease-backs at some flight schools. If you're only flying once per week, it will allow someone else to (pay to) fly it every other day. Passive income, baby!!!

 

[Checkout_my_Six]

so....lease backs are a way to make money?

 

[brian]]

I rented for almost 10 years. The entire time I was building a business and the primary focus of any "extra money" was investments in either the business or retirement. Some "wasted" on this flying thing...

Then in 2008 the market took a dump. Didn't feel it much until a couple of years later and I decided it was time to grow up and ditch this stupid flying thing.

I was miserable.
Made wife miserable.

So I did the only thing that made any sense: I bought an antique airplane that costs a little (not a lot) more than average to maintain. Mostly because I just liked the old bird. Can't explain it any more than that.

Is it worth it? Well, I'm still married. It hasn't killed me (yet) financially or literally. I would have to say it is worth it in some way.

Just don't ask my wife - she curses like a sailor ...

 

[Henning]

I disagree if you buy right you should be able to get your money back and then some.
I bought a RV8 for 63k flew it for 400 hours invested 12k in avionics and sold it for 90k, how is that not an Asset?
My 10 will be the same story.

Like I said, once you know the market, you can work with the few planes that have a supporting market and hedge on inflation, but by the time you sell for $90, when you factor in the insurance, the hangar, the maintenance... even at the reduced costs of ExAB, you are still not going to be "making money" on it compared to index fund market return for the same time investment.

Plus, when you own a plane, large repair costs can appear unscheduled from nowhere at anytime that leaves you with no plane to fly, an yet continued liability for the storage and insurance costs if based on an airport that requires it.

Make no mistakes, an aircraft that doesn't earn an income is straight up liability. It's gambling money that may pay off, and if you're a good gambler, you'll play the game and 'hover', never get far ahead, but never leaving the table hurting either. An uninformed gambler though, aviation can eat their lunch and send them home broke ass.

 

[WhiskeyPapa]

I'm 35 and have retirement savings already. My house is paid off, I max out my Roth IRA every year and invest some into regular ol' Vanguard index funds (not retirement funds) on top of that. So my retirement will be OK regardless.
)

If you're confident on the employment end and the wife agrees, you're probably okay to buy an inexpensive plane. Have fun! You're earned it.

 

[SCAirborne]

I am exactly in the same situation as the OP. When you finally decide what to do would you post a reply and let us/me know how it went?? I can't decide either so thanks for posting this and also for being a life experiment.

 

[flyingron]

Economically, probably not. However I flew for 15 years before I bought a plane and I kick myself for not doing it sooner.

 

[Henning]

If you can't decide because you worry over every dollar and dime, DO NOT BUY AN AIRPLANE. It will just make you depressed, angry, and insane; you'll start kicking the dog and drinking to excess, just don't do it. Rent, lease, whatever, just don't buy a plane. If the thought of gambling $20k strikes you as unconscionable, you have no business owning an aircraft, because that's the ante on an engine of a cheap plane.

 

[rbridges]

I recently started seriously saving for a plane. I've socked away about $20k in the past few months into my airplane savings fund. My plan is to save up around $60k to buy a $40k plane with a $20k reserve fund remaining ... hopefully within the next year or so.

The emotional side of my brain is saying, "Airplane! Airplane! Airplane!" I'm a total addict. I have to get my flying fix at least once a week to stay sane, and I can't wait to buy a plane and get my instrument rating so I can fly more consistently.

But the logical side of my brain says, "Wait a sec. You live in Texas. Real estate is dirt cheap. You could save up a bit more and pay cash for a rental house. Then you could take the income from that and save up even faster for another rental house, and another, and another. And before you know it, you'll be buying another rental property every few months and could fly a VERY nice plane."

So I'm torn between the toddler brain ("I want a plane now, now, now!") and the mature, wise brain ("You'll be better off in the long run if you delay this purchase for a few years.") I go back and forth on it, usually based on how readily available the club's plane is when I need to go somewhere.

I'd be particularly interested in advice from people who are striking a good balance between building financial security and spending on the aviation hobby. Every dollar I spend flying is a dollar I can't invest, and vice versa.

Personally, I wouldn't blow my savings account to get a plane. It's a judgement call. It's not like you buy the plane, and you're done. You still have the cost of insurance, tie down/hangar, squawks, annuals, GPS subscriptions, etc.

I own my plane, and I don't regret a minute of it. But I was able to get it with expendable income and not having to redo my budget. Of course, I got a plane in your price range and not a 6 figure Cirrus. Like I said, it's a judgement call.

 

[steingar]

Used to be an airplane wasn't a bad investment. You'll fly it around for awhile, maybe put in a new gee-gaw, and sell it and recoup much if not most of your costs. That seemed to tank out about 2008, and used airframes became so cheap that it made no financial sense to put in the gee-gaws. I am certain that the pendulum will swing the other way, it has to. They just aren't making as many new airplanes as they used to, and there are only so many used airframes to go around.

 

[NoBShere]

Thinking about this myself. It's a dollars, convenience and happiness equation and I am not good at math. Can an e6B help with this?

 

[Twin_Flyer]

If you really want it to feel like an investment, look into lease-backs at some flight schools. If you're only flying once per week, it will allow someone else to (pay to) fly it every other day. Passive income, baby!!!

 

[steingar]

If you really want it to feel like an investment, look into lease-backs at some flight schools. If you're only flying once per week, it will allow someone else to (pay to) fly it every other day. Passive income, baby!!!

I'll assume you are somewhat new to the ownership experience, and will try and instruct. Might benefit someone else too. I actually looked into a leaseback experience once. The insurance utterly destroyed any profit I might make from the arrangement. All I would do is subject my aircraft to constant wear and tear. Being my aircraft I would still get to fix it, too. Basically I could watch my aircraft be degraded while drawing even on the money. A loosing proposition if ever I saw one. Want to know why all those rentals look like dogs? Because they're abused by students pilots and their CFIs on a nearly routine basis. Treat rental cars the same way you treat your own? I certainly don't.

The engine gurus say running an engine all the time is the best thing for it. having someone else put wear and tear on your interior, paint, and avionics isn't the best thing for it.

 

[zwaustin]

I own my plane for me, not as any sort of investment as it is nothing more than a luxury item. There are plenty of ways to offset (not profit) some cost but the best part of ownership to me is pulling up planeside, loading it up and going where I Want to when I want to. It costs me a bit more than renting a slower plane but I love my mooney. Thought about partners and would entertain but I like to know I'm the only one flying it just how I want it flown.... If you can make it work financially go for it.

 

[Skywalker]

Yes, it is...

 

[txflyer]

Yes. Owning an airplane is definitely worth it.

 

[TexasAviation]

my personal guideline is to never have more than 10% of my net worth in toys (cars+plane in my case) for all the reasons you have stated, I want 90% of my net worth working for me, or at least not depreciating.

Ding ding ding! That's the kind of advice I was looking for. I hadn't thought in terms of an airplane-to-net-worth ratio before. I was thinking more about the operating costs, which will be a much bigger number over time and keep me from investing that chunk of my income every year. But having that kind of net-worth guideline makes sense to me, too.

To whoever asked about it, no, I've never read "Rich Dad, Poor Dad." I've heard of it and think I understand the basic premise behind it (buy stuff that goes up in value, not down). But I'm more from the Dave Ramsey school of money management. His advice has been great for my family. I'm very conservative and risk-averse, so his philosophy is a good fit for me personally.

And I totally agree that you only live once. Money is to be enjoyed. My concern is whether spending on a Cherokee now is going to prevent me from getting a Pilatus or Eclipse later And I don't think it will, as long as I keep everything in balance.

 

[Tom-D]

Ding ding ding! That's the kind of advice I was looking for.

Well maybe.

To me I could afford it, I liked flying, so I did it. I no longer have use for the aircraft, So I no longer own. To me it was never a case of using the money wisely, I simply owned and flew as I liked.

 

[Henning]

Thinking about this myself. It's a dollars, convenience and happiness equation and I am not good at math. Can an e6B help with this?

That might just be a fun novelty item, the "Should I buy a plane?" Whiz Wheel. On the Wind Angle side it has a "What plane should I buy?" Grid of planes.

 

[Henning]

Ownership is without-a-doubt, better than renting. It's not like you're throwing your cash away with a purchase, you'll likely get something back out of it when you go to sell again.

If you really want it to feel like an investment, look into lease-backs at some flight schools. If you're only flying once per week, it will allow someone else to (pay to) fly it every other day. Passive income, baby!!!

Not to dispute ownership being better than renting, but it has nothing to do with finances. The cost of purchase is just the ante in a very long game of poker that has regular raises, and you have a 1 in 5 chance of winning.

Lease back can work to an owner's advantage IF they treat it as a business and understand the aircraft is a consumable, if enduring, supply, for that business. It's not "your baby" any longer, and if it's making you money, it won't have time for you to fly it, plus you'll have to pay rent on it. Furthermore there is the IF you choose the right lease back model that protects you from expense rather than exposes you to getting ripped off every time the FBO/school is slow, and IF your business associate is a an honest person.

There's a lot of 'ifs' to the leaseback model, and I'm not one to say don't do it because I have seen it work very nicely with all parties very happy with the arrangement. However, like I indicated before, it's 5:1 losers to winners in the real world because face it, honest people are rare, our overriding social ethic is "I get mine, **** you." Everybody is always thinking of a scam, an easy way to get ahead.

So, to suggest to someone get into aviation ownership by buying a leaseback, and then not educating and guiding them through the process safely is an unkind act.

 

[tecprotb]

Like I said, once you know the market, you can work with the few planes that have a supporting market and hedge on inflation, but by the time you sell for $90, when you factor in the insurance, the hangar, the maintenance... even at the reduced costs of ExAB, you are still not going to be "making money" on it compared to index fund market return for the same time investment.

Plus, when you own a plane, large repair costs can appear unscheduled from nowhere at anytime that leaves you with no plane to fly, an yet continued liability for the storage and insurance costs if based on an airport that requires it.

Make no mistakes, an aircraft that doesn't earn an income is straight up liability. It's gambling money that may pay off, and if you're a good gambler, you'll play the game and 'hover', never get far ahead, but never leaving the table hurting either. An uninformed gambler though, aviation can eat their lunch and send them home broke ass.

You fail to touch on the 400 hours flown? if you buy a plane, let it sit, and never fly then its a bad investment.
If you fly 8 to 10 hours a month in a rental, that rental cash will go a long way to pay most if not all the expenses of owning a plane.
What I have seen is when renting its too easy to find an excuse to not go fly, when you own its so easy to jump in, go punch holes in the sky, lunch runs, or quick trips, when I quit flying I will sell until then I will own. If 100% ownership is not practical then a partnership, or flight school, set up right is very viable.

 

[Henning]

You fail to touch on the 400 hours flown? if you buy a plane, let it sit, and never fly then its a bad investment.
If you fly 8 to 10 hours a month in a rental, that rental cash will go a long way to pay most if not all the expenses of owning a plane.
What I have seen is when renting its too easy to find an excuse to not go fly, when you own its so easy to jump in, go punch holes in the sky, lunch runs, or quick trips, when I quit flying I will sell until then I will own. If 100% ownership is not practical then a partnership, or flight school, set up right is very viable.

Look, nothing says a liability can't pay off, that's why we undertake liabilities for the benefits they produce, not their direct cash value, but it is a gamble, and if the benefit you are seeking is an increase in the cash value of the plane, you better be pretty damned sharp how you place that bet, because it's an infinite parlay to the day you sell, and is more likely to eat your lunch than pay off.

Now if we are talking about usage value, enjoyment value, the fact that there s no rental market that has what you want/need... These are the issues that you need to focus on when determining if owning a plane is worth it. It basically breaks down to if you are buying a plane to provide a function, and you are willing to pay the reasonable costs to get that function, understanding that on any day you may have to spend $20,000 (or more) before you ever fly the plane again, or you have to sell it for salvage value (which in some cases is more profitable than selling it airworthy and flying).

If you are buying a plane as an asset, you need to put it in the extremely high risk section of your portfolio, and more likely than not, unless you are shrewd and active in the market and on maintenance, you will be disappointed by the performance. If you treat it as a consumable life commodity like a car, you'll be ok.

I'll put it like this, if you're comfortable sitting down at a hundred dollar blackjack table and can have fun playing for a few hours, you are a candidate for aircraft ownership. If that thought makes you queezy, or you don't have the resources to do it, or they stretch so far you're uncomfortable, you should back away from the table and keep renting at the $5 slots.

 

[bikert]

I can think of a whole lot worse things to spend money on than getting a plane. How about getting married and having kids? It makes absolutely no financial sense and is in most cases a terrible investment. But we do it for different reasons than making financial sense. Same with owning your own plane. Makes no sense if you just look at the $'s. So don't look at the $'s

 

[Henning]

I can think of a whole lot worse things to spend money on than getting a plane. How about getting married and having kids? It makes absolutely no financial sense and is in most cases a terrible investment. But we do it for different reasons than making financial sense. Same with owning your own plane. Makes no sense if you just look at the $'s. So don't look at the $'s

Boats are the same way. I have one owner, I was stuffing his receipts in a cupboard on the boat for him to grab, he never did. After a couple years, I can't close the cubby, "Dougie, you gonna take these or what?" "No" "I'm throwing them the **** out then, last call..." "Do it, I don't wanna know, I love my boat."

 

[TWinter]

Just like any expensive hobby..High performance cars/bikes, avid hunter or fisherman (boats, rods, other gear), collector of something...flying is a hobby. Don't over examine it. If you buy the plane and you buy it right you can always get your money back (or close to it) if you find that it does not work with your budget. I think the key is not getting in over your head and just give it a try..You will know if the fit is good.

 

[rbridges]

I own my plane for me, not as any sort of investment as it is nothing more than a luxury item. There are plenty of ways to offset (not profit) some cost but the best part of ownership to me is pulling up planeside, loading it up and going where I Want to when I want to. It costs me a bit more than renting a slower plane but I love my mooney. Thought about partners and would entertain but I like to know I'm the only one flying it just how I want it flown.... If you can make it work financially go for it.

man, it's like you read my mind. I feel the exact same way. maybe it's a mooney thing.

 

[Henning]

man, it's like you read my mind. I feel the exact same way. maybe it's a mooney thing.

The 80% of GA owners think the same thing. For the 80% the question is simply do I want it? Yes. Can I manage it? I think so. At that point you just enjoy it and see what happens. The 20% can't do that however, and they are the ones that quickly become dissatisfied. You have to go in for the right reasons and with the right mind set, or it will suck.

If your expectation is a positive financial return vs renting if you are fine with flying a 172 the 5 hours a month you fly, you will be disappointed.

 

[edo2000]

I can think of a whole lot worse things to spend money on than getting a plane. How about getting married and having kids? It makes absolutely no financial sense and is in most cases a terrible investment. But we do it for different reasons than making financial sense. Same with owning your own plane. Makes no sense if you just look at the $'s. So don't look at the $'s

Great comment. Sums it up nicely.

I've owned aircraft since I learned to fly when I was 17. I spent money that I could have invested, sure. But flying was/is a part of my identity that I wouldn't want to give up. As has been said here, the airplanes I have rented over the years (and instructed students in) are quite a bit less exciting that the ones I chose to buy.

I'm in my 50's now and recently moved from Alaska down to the L48 and took a higher paying job. Sold my 1/2 of the C185 and Scout floatplane to my partner. Decided it would be wisest to stop flying, since my wife has less interest in it, there aren't as many beautiful beaches and lakes to land on (compared with AK), and you can never have enough in your retirement accounts. This lasted a few months before I was wondering what my new house would look like from the air, and how much time I could save on the drive to Salt Lake or Albuquerque if I flew, etc. So I have another airplane. Much happier now . Not wiser, but happier.

 

[JoseCuervo]

I disagree if you buy right you should be able to get your money back and then some.
I bought a RV8 for 63k flew it for 400 hours invested 12k in avionics and sold it for 90k, how is that not an Asset?
My 10 will be the same story.

Did the guy you bought the -8 for $63k from make money?

Will the guy you sold the -8 for $90k make money?

If all 3 of you make money on the magical beanstalk, good for everyone.

If you made money by finding a seller "losing", and then finding a buyer who "paid too much", then that is not a sustainable economic model.

 

[Henning]

Did the guy you bought the -8 for $63k from make money?

Will the guy you sold the -8 for $90k make money?

If all 3 of you make money on the magical beanstalk, good for everyone.

If you made money by finding a seller "losing", and then finding a buyer who "paid too much", then that is not a sustainable economic model.

You have just explained why Capitalism is a failure, and fiat currency compounds it by turning it into a Ponzi scheme. You just identified our primary economic model goal, a goal with no equilibrium possible. More people will lose than win in order for there to be a 'profit'. The problem with fiat currency is the gains are imaginary, while the costs are physical human suffering.

 

[Checkout_my_Six]

If you made money by finding a seller "losing", and then finding a buyer who "paid too much", then that is not a sustainable economic model.

haters gonna hate....bro.

 

[nddons]

Gosh, I had a similar thread about a week ago. I too ponder the wisdom of plunking $60,000 to $100,000 into an airplane. I'm ten years from planned retirement & have high income with decent assets & no debt. I can afford it but will it be worth the expense? Renting is working for me now but it's a hassle if you want an airplane for the entire day but will only put a few hours on it.

I guess it's personal decision to be made. So, I'll pour me some scotch & seek my inner self.

I'm in a similar situation, and use your method of self evaluation, but mostly with bourbon.

 

[Henning]

haters gonna hate....bro.

Yep, which is why we are in a losing war, we're the takers and the rest of the world loses for it. That is the reality of dominating the world markets with fiat currency, and why the founders forbid it. It's unethical which causes suffering which leads to wars. Simple. It's all cool and everything, but understand, this is why Islamic terrorists are active within America, and why we have lost to the Chinese, because they outplayed us at the game. Next we get to be the hateful ones as we suffer under their taking to repay the debt to them we've created. Payback is a mother ****er, and Vito Chin is coming to collect and has a huge assed bat to collect with.

 

[JoseCuervo]

haters gonna hate....bro.

Do you think all 3 parties in the Rv-8 / Magic Beanstalk transaction will make money with the same plane?

 

[edo2000]

Do you think all 3 parties in the Rv-8 / Magic Beanstalk transaction will make money with the same plane?

I don't think anyone is saying its magic. I think we are saying that well maintained aircraft don't lose value nearly as quickly as automobiles and other toys you might own. The technology of the certified GA airframe hasn't changed a lot and many excellent aircraft are just not built anymore, the like the Cessna 185 I just sold. I personally have never sold an aircraft that didn't appreciate significantly in $value while I owned it. I never did all the "correct for inflation" calcs, because I honestly don't care how great of an investment is was or was not. In general, if you do your homework when shopping and then maintain your aircraft, you can get your money back when you choose to sell it.

 

[Henning]

I don't think anyone is saying its magic. I think we are saying that well maintained aircraft don't lose value nearly as quickly as automobiles and other toys you might own. The technology of the certified GA airframe hasn't changed a lot and many excellent aircraft are just not built anymore, the like the Cessna 185 I just sold. I personally have never sold an aircraft that didn't appreciate significantly in $value while I owned it. I never did all the "correct for inflation" calcs, because I honestly don't care how great of an investment is was or was not. In general, if you do your homework when shopping and then maintain your aircraft, you can get your money back when you choose to sell it.

There is the rub and the gamble, the cost of maintaining that level of "well maintained aircraft", it comes with a substantial ongoing, and sometimes large jackpot, price tag. Like Wayne said, "You don't know what it costs to own a plane until you sell it and add up all the receipts."

The average 172 pilot who flys around a bit a couple of times a month, will have aviation cost him more than had he rented.

The advantage of light GA ownership really starts to show when you have regular 200-500mile commutes to make where you park the plane at the other end for a few days. Remote offices, lake/beach house with the family for the weekend... This is the user that sees the greatest benefit from GA ownership.
The major deficits to renting are scheduling multi day, multi day $$$ minimums, and the availability of more capable aircraft than 160-180 hp stuff. When you/the family can use the plane as a time machine so you can enjoy life more, now you get the full value of GA ownership.

In some markets you have good flying clubs available. If I still lived in the San Diego market, I would say, "No, the cost of ownership is not worth it, because I belong to Plus One Flyers and have a whole range of different aircraft available to me on good terms, and there are enough advanced planes available that have good multi day terms and availability." Unfortunately I do not live there any longer, and no such club exists in the SoFla market.

 

[JoseCuervo]

I don't think anyone is saying its magic. I think we are saying that well maintained aircraft don't lose value nearly as quickly as automobiles and other toys you might own. The technology of the certified GA airframe hasn't changed a lot and many excellent aircraft are just not built anymore, the like the Cessna 185 I just sold. I personally have never sold an aircraft that didn't appreciate significantly in $value while I owned it. I never did all the "correct for inflation" calcs, because I honestly don't care how great of an investment is was or was not. In general, if you do your homework when shopping and then maintain your aircraft, you can get your money back when you choose to sell it.

The RV-8 example had a $27k appreciation (on a $63k purchase) during the period of ownership.

Do you think that same rate of appreciation happened to the guy who sold it for $63k?

Do you think that same rate of appreciation happened to the guy who bought it for $90k?

If not, the middle guy either got lucky with the time period he happened to be in possession, or, he found a distressed seller that needed to get rid of the plane. And then he found an ill-informed buyer who took it off his his hands at a premium.

If everyone makes $27k each time they buy and sell an RV-8, then somebody found a money tree, or some magic beanstalks.

(And, there is nothing wrong with buying stuff cheap from sellers who need money, NOW. And, there is nothing wrong with selling stuff for top$$$ by educated buyers who are willing to pay the asking price. But, don't kid yourself that those are routine.)

 

[Checkout_my_Six]

sometimes ya just can't fix....stupid. YMMV

 

[DoubleD]

Well, that may be true for niche aircraft like the C185 and some others, and it was generally true before the stock market crash of 2001-2002, but it has not been true since then. Values MAY be stabilizing and maybe it will be true again. However, demographics of the pilot population argue against that.

 

[tecprotb]

The RV-8 example had a $27k appreciation (on a $63k purchase) during the period of ownership.

Do you think that same rate of appreciation happened to the guy who sold it for $63k?

Do you think that same rate of appreciation happened to the guy who bought it for $90k?

If not, the middle guy either got lucky with the time period he happened to be in possession, or, he found a distressed seller that needed to get rid of the plane. And then he found an ill-informed buyer who took it off his his hands at a premium.

If everyone makes $27k each time they buy and sell an RV-8, then somebody found a money tree, or some magic beanstalks.

(And, there is nothing wrong with buying stuff cheap from sellers who need money, NOW. And, there is nothing wrong with selling stuff for top$$$ by educated buyers who are willing to pay the asking price. But, don't kid yourself that those are routine.)

Did you not read the part of me sticking 12k in avionics? I'm sure I added a couple of grand in misc. Its 13-15k profit.
I owned it for 5 years thats not a windfall by any means.