Purchase-Budget Revelation

FlySince9

FlySince9

En-Route
Joined
Mar 7, 2011
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3,151
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Huntersville, NC
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Display name:
Jerry
Recent events have made me decide that when the time comes that I get serious about buying a plane (next year), I will include in my budget 5K, or more, for problems that are sure to come up in the first 100 hours or so... and even with that I could still be grounded by a gremlin. It seems, more times than not, owners sell their plane because there is something lurking/looming that they don't want to pay for, so decide to unload it. Not saying that's a bad thing, necessarily, but dam, it sucks for the buyer and is an unfortunate reality that can put the kibosh on the elation a new owner would be feeling... :( It seems there are things that just don't show up, even in the most thorough of Pre-purchase inspections. Scary!
 
This is why many people advocate getting to know the buyer first.

Also, some type clubs/forums are very good at knowing by serial number which airframes should not be touched.

What I would tell you is that if you think used plane shopping is similar to car shopping, you need to change your paradigm entirely.

I’ve started to look at it from the concept that the plane I buy is a threat to my financial security and what steps can I take to mitigate the threat.

But, even so, I’m building in a reserve in my purchase budget to replace the motor on day 1, since you can’t control a lot of things with airplanes.
 
FlySince9 said:
Recent events have made me decide that when the time comes that I get serious about buying a plane (next year), I will include in my budget 5K, or more, for problems that are sure to come up in the first 100 hours or so... and even with that I could still be grounded by a gremlin. It seems, more times than not, owners sell their plane because there is something lurking/looming that they don't want to pay for, so decide to unload it. Not saying that's a bad thing, necessarily, but dam, it sucks for the buyer and is an unfortunate reality that can put the kibosh on the elation a new owner would be feeling... :( It seems there are things that just don't show up, even in the most thorough of Pre-purchase inspections. Scary!
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Some people go so far as to recommend having the cost of a new engine on hand before owning. I don’t, but there’s always a blown engine and no way to replace it to ruin a few years of your life. I know someone who had that happen in a co-ownership. It wasn’t new to them at the time or anything, though. Three years after it started, he made a deal with the people who couldn’t afford to fix the airplane and bought it from them so he could then pay to fix and fly it.
 
Wise pilots before me have advised to reserve a MX fund of ~10% of the purchase price, as you may well go through that amount in the first year or two to fix things the DPO may have deferred. I know in the 1st two years of ownership we had to have a CS prop hub reman and a mag reman.
 
I've seen a lot of people recommending having 10% of the purchase price available for 1st year mx costs. whatever the # is, definitely have something saved up. even for non-mx stuff, like things you want to upgrade, maybe you need a cover........dayum, Bill just posted the 10% thing, I'm slow...
 
FlySince9 said:
Recent events have made me decide that when the time comes that I get serious about buying a plane (next year), I will include in my budget 5K, or more, for problems that are sure to come up in the first 100 hours or so... and even with that I could still be grounded by a gremlin. It seems, more times than not, owners sell their plane because there is something lurking/looming that they don't want to pay for, so decide to unload it. Not saying that's a bad thing, necessarily, but dam, it sucks for the buyer and is an unfortunate reality that can put the kibosh on the elation a new owner would be feeling... :( It seems there are things that just don't show up, even in the most thorough of Pre-purchase inspections. Scary!
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Reality is that the engine could lunch before the ink is dry on the transfer paperwork. That's aviation, and a prospective owner needs to be able to fund that possibility.
 
It is a good idea to have funds available for unexpected costs. What that number is I have no idea. When I purchased my plane I had little more than the purchase price saved up (I paid cash). Sure glad nothing cropped up in the flying hours after the purchase.

I did not buy a very expensive plane paid $23,000 in 1996. I own a 1974 Beech B-19 Sport.

The thing that may have saved me was the plane was regularly flown and the owner had the proper maintenance done during his ownership.
 
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I thought I was pretty prepared for the first year of ownership. I think I was, but I didn't realize the costs would overflow to the second year. I guess a lot of people sell because they can't afford to keep a plane up. It also doesn't help that I really want everything to work perfectly.

Here is a list of the items that needed attention on my plane in the first two years. This is for a common PA28, a plane worth less than 100K.

Year 1
500 hr Magneto inspection
Overhaul carburetor
8 new spark plugs
Overhaul attitude indicator
Minor labor issue with HSI

Year 2
Autopilot Overhaul on old Piper autopilot
ADS-B upgrade (Optional)
VOR antenna
New Aft Muffler and exhaust stack
Weld front muffler (3 weeks after aft)
Replace Vacuum pump (900 hours)
Vertical card compass (semi-optional, but needed)
406/121.5 ELT (Old Narco 10 quit)

The first year issues equaled about 10% of the purchase price. The second year issues (minus optional ADS-B) was about 7% of purchase price. This doesn't include any general maintenance like changing oil or annual inspection. I also did much of the year 2 work under supervision of A&P. I don't say any of this to scare people from owning a plane. It is still one of the best decisions I have made. However, I was dreaming of a bigger/faster/more advanced airplane. If I had purchased that rather than my PA28, I wonder if the expenses would have left me plane poor. On the plus side, I really think year 3 expenses will be less as I am overall satisfied with the condition of the plane.
 
eman1200 said:
I've seen a lot of people recommending having 10% of the purchase price available for 1st year mx costs. whatever the # is, definitely have something saved up. even for non-mx stuff, like things you want to upgrade, maybe you need a cover........dayum, Bill just posted the 10% thing, I'm slow...
Click to expand...

How'd your Monanza turned out in the shop?
 
FlySince9 said:
Recent events have made me decide that when the time comes that I get serious about buying a plane (next year), I will include in my budget 5K, or more, for problems that are sure to come up in the first 100 hours or so... and even with that I could still be grounded by a gremlin. It seems, more times than not, owners sell their plane because there is something lurking/looming that they don't want to pay for, so decide to unload it. Not saying that's a bad thing, necessarily, but dam, it sucks for the buyer and is an unfortunate reality that can put the kibosh on the elation a new owner would be feeling... :( It seems there are things that just don't show up, even in the most thorough of Pre-purchase inspections. Scary!
Click to expand...

Disclaimer: Long post. I started off thinking this would be a 1-2 liner...not the case. Sorry

I think 5K may be a little light depending on the type plane you plan on buying. Also depending on how much excess money you have left each month from however you get your money. In addition to the type plane, recent usage, type previous owner (meticulous maintainer vs a put-it-offer), etc all come into play. If one had to put a number on it, I think the best realistic would be ~10% of the purchase price. Plus as @eman1200 says, you may want a couple upgrades?

In my first 7 months of owning I've done the following maintenance:
-HSI repair (G5 HSI wasn't available back then unfortunately)
-Double prop O/H (obviously a single driver would catch a 50% break here)
-Left fuel divider O/H
-Left Alt belt replaced
-G/S connector cleaned/replace
-Mandatory heater inspection via brand new AD

Lucky for me, no catastrophic expenses. Keep in mind a few things. This all totaled more than 10% of purchase price (had I been a single I would be right at the 10%). Also, my first year is not up and my first Annual Inspection will be at the 1yr point. PS. This doesn't account for a new heater as the existing one failed the brand new AD, lucky timing. I didn't include oil change/labs. I think I've put about 50-60 hours on her and about 16 states under her. Am starting to feel pretty good about her health now (knock on wood).

For upgrades, that is obviously mostly self inflicted. I wanted my bird to be as safe an IFR traveling machine as possible. As such, I chose to do the following first year upgrades:

-Swap the GTX327 for a GTX345
-Install an Insight G4 Twin Engine monitoring system
-WAAS upgrade my GNS530
-Install a Garmin G5 in the primary AI spot and shuffle that to the T&B spot and move that down one left one.

This has given me traffic and wx in the plane, 12 cylinder monitoring to include, OP/OT/MP/RPM/Fuel Flow/Fuel totalization/ETC, LPV/GS approaches everywhere (almost), and an independent 4 hour battery backup AHRS AI/ASI/ALT/HDG/ETC. Basically the plane had been upgraded from the 70's to the 90's when I bought it and I took it up to 2020 minus a modern A/P.

Ramble over....having a bit of a maintenance/upgrade budget is very prudent on your part.
 
Consider the prebuy the most in depth and hard core inspection you'll ever preform on the plane, look for a reason NOT to buy it, any snags come off the prior agreed price based on the owners stated condition.

More people want your money than his plane.

Make sure you AP knows the type and doesn't care about the owner.
 
Rcmutz said:
Ouch! Was there any telltale signs of the fuel tank leak prior to the purchase? Who did the prebuy?
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I hired an independent third-party to do the pre buy but I was in Texas and he was in Connecticut. Everything came back good. I've already got it fixed I have to pay the guy the bill tomorrow. I've already been told I'm a moron because I did not take it to Fletch air but who knows maybe this guy knows what he's doing
 
SixPapaCharlie said:
I hired an independent third-party to do the pre buy but I was in Texas and he was in Connecticut. Everything came back good. I've already got it fixed I have to pay the guy the bill tomorrow. I've already been told I'm a moron because I did not take it to Fletch air but who knows maybe this guy knows what he's doing
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Glad you got it fixed already. I too had an independent 3rd party (prior 310 owner) do my pre-purchase. None of what I've had to fix could have been caught on a pre-purchase. Just plane owner problems.
 
Skyrys62 said:
Do overhauled engines not have some type of warranty?
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5 Miles or 5 Minutes, which ever comes first. :)

From a local reputable engine shop:
"... limits its warranty on the listed engine overhauled to be free from defects in material and workmanship under normal use and service for a period of two years or 500 hours, whichever occurs first from the completion date of the overhaul."
 
denverpilot said:
It’s nice that new folks here appear to know how to type. LOL. :)

That was a nice detailed list of stuff he had to take care of on his airplane. Be nice!
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Oh c'mon Nate, I was being nice! My way, but I was being nice. You're a sport too man. :thumbsup:
 
I wish my first annual was only 10% of the purchase price! A pre-buy was done but apparently the seats and floor boards were not taken out:rolleyes:. First annual I told the mechanic to inspect it stem to stern and he found an improper repair done where the right wing attaches to the fame. The repair had cracked again so we replaced it with a new part. First annual = 33% of the plane price and the plane was down 6 weeks. You live and learn. Next plane will have a complete annual inspection, even at my expense, and we will negotiate from there!
:)
 
I used a 75:25 rule.
If total budget for purchase is 100K, only spend 75K on purchase price, the rest will be needed for transaction fees, training, insurance, hangar, repairs, headset, wing jacks, tug, etc etc etc.
 
Eman's plane out of the shop?

Nice upgrade!

hqdefault.jpg
 
First lesson of new airplane ownership......It ain't the cost of admission.....it's the cost to own. :D
 
N659HB said:
Jerry, you just need the club to diversify its holdings... and add an SR22. ;)
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Right? But don't think that'll happen anytime soon... We're about to put the hawk in for its TBO/OH... (this year) but there is pre-chatter about Power-flow exhaust upgrade during that OH. With 11 members and only 3 or 4 of us that fly it regularly (more like 2 of us) its almost like being a single owner anyway(less the outta-pocket). So there isn't enough revenue to add another airframe and maintain it properly. I do wish there was interest in at least upgrading to a 182 or something. There was some talk when we were about to drop $28k-$30k on a GTN750 and other stuff, but that died pretty quickly... (though we did go for the avionics) Votes from inactive members kinda put the kibosh on the aircraft change....
 
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