Rent, Buy, or Share . . . The is the question!

[BassDudeE90]

I am new to the "fly-for-fun" thing. I have no plans of becoming a commerical or airline pilot (I'm getting ready to retire from the Army and just want to relax). My question is: Buy, rent, or share cost? So far I've been renting. I plan to buy (perhaps tomorrow if I hit the Lotto tonight). Besides being a into flying I like fast cars.

I usually lease cars (24-month terms) so I can get a new car every two years. However, judging by what I have read on this forum, I can gather that it is best to buy an old plane (initial cost effectiveness). So, as I can relate to cars, although I can save by purchasing an old plane, on the long run, would I spend more on maintenance, repairs, parts, etc?

I sorta (at the risk of sounding like a dumba$$ due to my inexperience) compare that with the guy who buys an old MG and spends 6 days under the hood just to be able to take it out for a Sunday drive.

[jetlag700]

Buy an airplane! Simple. Do you share your car? Do you rent your car? Buy a plane that way no one can say you can't use it. And you can paint it nightmare purple with yellow dots and there aint a damn thing any partner can say about it.

[BassDudeE90]

Originally Posted by jetlag700

And you can paint it nightmare purple with yellow dots and there aint a damn thing any partner can say about it.

I'll drink to that

[mooney]

The question of Buying an aircraft always boils down to money. I fly a Mooney and have owned six aircraft in my 33 years flying. Two twin engines.
Have questions about owning, maintenance, partners operating costs, ask me. As for renting, this makes sense for most. Not for me. I'll do without many things, not my airplane. Want to cut costs, share your experience and costs by flying with a friend, not a partner. Mike

[Moonvik]

Ok Mooney, I am seeking the goods on ownership. I am seeking a fast x/c airplane. But I live in a large city meaning some of the fixed costs are ridiculous. So far it seems a Mooney 20J/201/231 will cost $15-25K per year.

Annual- $3K
Hangar- $6K
Insurance- $2.5K

Plus operating, mtc reserve, engine reserve $30-40 combined) fuel $60-70 per hour. So 100 hours =$10K plus around $10K fixed above. None of this inlcudes acquisition cost of the plane.

Can Mooney's be covered and tied down with minimal impact or is hangar mandatory? Are these numbers reasonable. What has been your experience? Others?

[navyretread]

OK, I was long overdue for this kind of thing and things were slowing down at the office so I whipped out my trusty HP12C (old school habits die hard) and did a quick analysis of a couple of scenarios, based upon data accumulation I imagine every one of us does from time to time.

Assumptions:
1. Opportunity cost is 6.5% per year. You can plug in higher if you want but that's a fairly conservative investment portfolio figuring ups and downs like the past few years.
2. 96 hours a year. Based upon my personal experience, that's the minimum I can feel comfortable maintaining proficiency.
3. No inflation. I'm only researching comparisons so this makes it easier. Actual costs would be greater as fuel, insurance and inflation take their inevitable bite.
4. 10 year comparison period.
5. No tax benefits. Could make a difference if you use your plane for business and write off a portion of the investment.

So, scenario one is rent from my flying school, mix of Warriors, Archers and Cutlasses for longer cross countries. Average is $95/hour. It's been going up but, again, no inflation, it's just for comparison.

Scenario two is buy a Cardinal RG or Arrow III- purchase price $65,000, $5000 in additional first year expenses, $11,100/year annual operating cost including tiedowns, insurance, reserves, etc. etc. etc. - sell the thing in ten years for $60,000.

Scenario three is buy a Remos G-3-purchase price with trailer, IFR package, Ballistic Recovery, etc. is $140,000. Annual operating costs (buying mogas at 3.5 gph, keeping it in a trailer and I don't know how workable that is) is $3912.Sell in ten years at $80,000 (yeah, don't think it won't depreciate like a lead balloon).

Results:

Option 1: Just under $70,000 negative value. No surprise, it's almost a straight line curve.

Option 2: Big negative jump- ($109,536).

Option 3: Biggest surprise- ($120,650).

So, over ten years, it would cost you $40 grand more to buy an old plane than to rent (maybe slightly less if you buy less plane) and a whopping $50 grand plus to buy that tricked out, brand new LSA with the low operating cost .

A couple of caveats:
1. It's not apples and apples to compare a rental aircraft with your own bird. But you have to decide how how much more you're willing to pay for papayas or kiwis or whatever instead.
2. Assumes your going to invest that money you save renting airplanes at an annual yield of 6.5%. In reality, I'll probably spend it on a boat.

Cheers

nrt

[BassDudeE90]

Originally Posted by navyretread

Results:

Option 1: Just under $70,000 negative value. No surprise, it's almost a straight line curve.

Option 2: Big negative jump- ($109,536).

Option 3: Biggest surprise- ($120,650).

So, over ten years, it would cost you $40 grand more to buy an old plane than to rent (maybe slightly less if you buy less plane) and a whopping $50 grand plus to buy that tricked out, brand new LSA with the low operating cost .

nrt

Wow!!! Thanks for the very well thought out rundown. I'm so glad there are people who are smarter than me roaming the world.

I tried to figure it out on my own, but I ran out of fingers and toes

I guess I'll continue to rent . . . Up until the day I hit the MegaLottery!

BDE90

[navyretread]

Yeah, I do tend to overstate the obvious. It's my way of dealing with the fact that I don't own an airplane, can't afford the ones I'd like and can't justify the ones I can.

Actually, I was sort of hoping something wonderful would jump out at me that made sense of buying. The real surprise was the SLA. All the hoopla about operating costs still doesn't offset the higher acquisition expense.

Safe flying,

nrt