Leaseback

brien23

brien23

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In the airplane leaseback agreement, flight schools rent out your personally owned airplane. In return, they manage the maintenance and repairs, clean the airplane, and handle the scheduling. How many hours are too few hours a year, or is this just another aircraft on the ramp for the flight school to list. How much should the owner expect to pay to use the aircraft under lease. AOPA has a nice Lease Agreement, any other add on items that the owner might want to add.
 
Managing the maint and repairs isn't real hard, especially if you own the shop... Paying for them on the other hand..

I've always been suspicious off any place trying to talk people into this money making opportunity. If it was so great, why don't they just lease or buy another aircraft?
 
I have seenleaebacks make good money, I have seen them lose money. The one common factor is the plane itself goes to crap. It gets used by students beating the crap out of them. Then if you want your plane to look good or have everything working properly, you have to put more money in to fix these items.
 
I've witnessed a few leaseback situations, and had one of my very own. Managed correctly, we only saw increased maintenance costs, reduced resale value, increased insurance, increased hail damage, mounds of paperwork increased to mountains, IRS visits, bounced checks, and the airplanes got beat to hell. (Shop rags take bugs offn winders real nice) Might have broke even though I didn't feel like it. Plus, I hardly got to fly and ended up renting sometimes. Was terrific fun, however, and I'd never replace the memories, or wish to repeat them.
 
My sometime boss has three on leaseback right now, an old CFII of mine used to have at least 17 (might have been 27) but got out of it. Don't know about the CFII but my boss clears $1000 or so per month on a good month on each one. These, my boss', are your basic mid-70's 4-seaters with Garmin 430 or 530. But, big but, he does the maintenance himself. Or rather, his mechanics do. Still, a $6k flap repair on the 172 knocks out half the year's profits (he sent it out to the sheet metal shop, later he would have given it to me and saved at least 50%).
 
I had my plane on leaseback at a small Chicago area airport (3CK) and also at a large GA airport (DPA). At 3CK, it was on leaseback with the local FBO/flight school. I got screwed over pretty good (first time airplane owner, etc.). Once I moved to the big airport and put it under a flying club with an honest owner, then I almost broke even. There was one guy at the club who's Warrior was so busy he ended up with 3 of them. But they were beat up pretty hard.

In short, primary trainer aircraft that fly a lot can turn a profit. But if the flight school is doing the maintenance, maybe not.

YMMV
 
I was involved in lease backs for years. The only way to make money on a lease back is if you have the ability to do your own maintenance. If your paying shop rate you will never break even.
 
Had a 182 on leaseback......disaster! I was subsidizing others flying!
 
We may be facing no rental at our airport, would it be doable at all for 10 guys that love aviation but don’t want to offer their personal plane up for sacrifice to throw in 3k each, buy a 20k c150 and do a leaseback not to make money but try to keep the slow flow of new pilots from all but totally drying up locally?
 
Huckster79 said:
We may be facing no rental at our airport, would it be doable at all for 10 guys that love aviation but don’t want to offer their personal plane up for sacrifice to throw in 3k each, buy a 20k c150 and do a leaseback not to make money but try to keep the slow flow of new pilots from all but totally drying up locally?
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Better idea, I think, would put a little more money into it and buy a 172 and set it up as a flying club.
 
Terry M - 3CK (Chicago) said:
@donjohnston was it the pa28-140 with the cruise prop? Or one of the NIFC planes?

Do you still own and fly out of DPA?
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No, this was down at DPA with Cougar Aviation Flying Club. After DPA implemented their onerous insurance requirements, the club shut down. I rented the 182-RG out for another year and then moved back up to 3CK and stopped renting it out. I'm back in Florida now.
 
Greg Bockelman said:
Better idea, I think, would put a little more money into it and buy a 172 and set it up as a flying club.
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Good thought, I’ve toyed with that to... I would like that as that would give me access to a 4 place airplane, my bird is only two. May interest some folks that dont want to give up flying but aren’t using their plane enough, where a 150 likely would not...
 
Huckster79 said:
Good thought, I’ve toyed with that to... I would like that as that would give me access to a 4 place airplane, my bird is only two. May interest some folks that dont want to give up flying but aren’t using their plane enough, where a 150 likely would not...
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You're over-thinking this. A 172 offers much versatility to more than off-set any disadvantage compared to a 150; they're both wonderful, legacy airplanes. Choose wisely.
 
that is a cool idea to set up a club, get a couple of instructors into the club and then you can offer a way for folks to buy in for a few thousand dollars and pay a small monthly to be an equity club member. This would open up private instruction, plus provide a plane for those that just want to fly 10-20 hours a year, plus give you a 4 seat option for not a lot of money.

For a baseline: I'm in a really well run club with 2x172s and 1x182. All mid 70's high time planes that we keep in good shape and have 430w+G5's in them. 60 members, $2,300 buy in and then $70/month fixed cost. On top of that we pay $100/wet tach for the 172, with a minimum charge of one hour of flight time every 2 months.

AOPA has some resources, and possible free consultations, on how to set up flying clubs.
 
MIFlyer said:
that is a cool idea to set up a club, get a couple of instructors into the club and then you can offer a way for folks to buy in for a few thousand dollars and pay a small monthly to be an equity club member. This would open up private instruction, plus provide a plane for those that just want to fly 10-20 hours a year, plus give you a 4 seat option for not a lot of money.

For a baseline: I'm in a really well run club with 2x172s and 1x182. All mid 70's high time planes that we keep in good shape and have 430w+G5's in them. 60 members, $2,300 buy in and then $70/month fixed cost. On top of that we pay $100/wet tach for the 172, with a minimum charge of one hour of flight time every 2 months.

AOPA has some resources, and possible free consultations, on how to set up flying clubs.
Click to expand...

I’m in a 12 person club with a nice 172 upgraded to the 180hp- buy in is about $3,000, dies of $80 a month and $80 a wet tach hour... it’s a good set up. I just spoke with a guy on field tonight with a 152 that he would be willing to discuss how it could become a club plane... we could always start there as it would be a lower initial expense to get going- as this guy loves Aviation and though couldn’t just donate it, wouldn’t likely expect fair market value in cold hard cash...
 
brien23 said:
In the airplane leaseback agreement, flight schools rent out your personally owned airplane. In return, they manage the maintenance and repairs, clean the airplane, and handle the scheduling. How many hours are too few hours a year, or is this just another aircraft on the ramp for the flight school to list. How much should the owner expect to pay to use the aircraft under lease. AOPA has a nice Lease Agreement, any other add on items that the owner might want to add.
Click to expand...

I am real particular.. I don't even let my best friends fly my airplanes.
Who in their right mind would let a flight school trash out their plane????
I don't even take my friends to the lake on my boat because it looks new and my friends get drunk and stupid. LOL!
 
If I owned a plane, I'd probably be more on your side of the aisle. If I found myself in a position where I couldn't afford to keep it as sole owner, I would hope I would look for a partner or two, or just sell it.
 
We briefly considered leaseback before we bought the Skyhawk, then recognized that the reason we became owners was due to the condition and availability (lack thereof) of the rental planes (which were all leasebacks). They were generally hammered, and maintenance was the legal minimum. (Flight school didn't last long after I got my ticket.)
Ironically, N933P is now available to rent from the new owners (a NC flight school.)
 
I had a nice Cessna 152, that I stupidly leased to a flight school at Boeing Field. About a month later a kid flew it into Puget Sound. He said after flying it for 4.3 hours....""All of a sudden, it got real rough, and I had to "put her in!!"""
 
kgruber said:
I had a nice Cessna 152, that I stupidly leased to a flight school at Boeing Field. About a month later a kid flew it into Puget Sound. He said after flying it for 4.3 hours....""All of a sudden, it got real rough, and I had to "put her in!!"""
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Ouch.
 
[if you put a plan3 such as a 172, 152, or Warrior into a flight school that can turn 700 hours a year. You will likely make money.
 
Clip4 said:
[if you put a plan3 such as a 172, 152, or Warrior into a flight school that can turn 700 hours a year. You will likely make money.
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If "you" means "the mechanic", I shall agree. :)
 
pigpenracing said:
I am real particular.. I don't even let my best friends fly my airplanes.
Who in their right mind would let a flight school trash out their plane????
I don't even take my friends to the lake on my boat because it looks new and my friends get drunk and stupid. LOL!
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You need new friends. ;)
 
Clip4 said:
[if you put a plan3 such as a 172, 152, or Warrior into a flight school that can turn 700 hours a year. You will likely make money.
Click to expand...
Over the years as an observer, this is what I've noticed.

Common basic trainers seem to do well. So do (did) complex trainers (at least while complex was needed for the Commercial and CFI). More capable traveling machines, especially one-of-a-kind at an FBO or club, less so (unless an operation specializes).

As an acquaintance put it to me when he was going to terminate the leaseback on his TR182, "it's costing me more for insurance and maintenance, and all I am getting back is a tired airplane."
 
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