Creative Plane Ownerships

Not an expert my any means, barely know anything really.
Have heard that leasebacks can be "costly" for you though. If you are depending on that money to help pay for the plane.
Partnership I think would be the best way if I was going to do it.
Whether we like it or not, people treat a plane better that they "own" vs one that they are just renting from an FBO.

Mark B

 

Beware of the leaseback scam. The pitch goes something like this:

"Own your airplane at no cost and make money to boot" or something else similar.

The idea is for YOU to buy the airplane and lease it back to the FBO, flight school, etc. who will cut you a monthly check for it's use, and YOU get to take the tax deduction. Etc, etc.

The problem here is when you look into the contract that they will inevitably have you sign. You'll see right away that it is YOU who assumes ALL the risk and expense and THEY make no promises whatsoever as to what you will receive monthly.

They will not allow you to provide the maintenance, even if you are an A&P mechanic. The reason: "We need to have the aircraft on the flight line, flight ready at all times. Therefore we will deduct the cost of maintenance from your monthly receipts." The maintence costs then become exhorbitant if not downright ficticious in the effort to keep all your hard earned money. Thisgs like $200.00 oil changes are not unheard of, and every teeny squwak is billed back to you.

Insurance costs are on your own. Wait until you get that bill when you tell your insurance company you're leasing it back to an FBO. When, and it WILL happen, someone prangs your aircraft, the "downtime" comes out of YOUR pocket in lost revenue when the plane is not flying. The FBO will just book someone elses. In fact there is never a guarantee of any minimum number of hours that your airplane will fly per month.

What will you do when you want to fly and the plane is either booked or you need that revenue?

Try telling them that you will take care of maintenance and fuel bills, etc. and watch them run away - BECAUSE THEY KNOW THAT YOU ARE AWARE OF THE SCAM!

Now, before this turns into all doom and gloom, I have a suggestion. One which worked for me very well and which I'd like to do again someday. Buy the right airplane and Book and Schedule it yourself. Get friendly with some independant flight instructors to teach in your airplane. Put up notices on the airport bulletin board. If you bought the right airplane and don't need to charge the proces at the flight school, and can stand to make a bit less then they, I assure you that you will have pilots flocking to your door.

I used to do this when I lived in NY. I was netting $1000.00 a month after all expenses and fuel bills. That was in the mid 1970's. My Piper Cherokee 140 was flying 60 hours a month. Yes, when I wanted to fly, I sometimes had to rent someone elses 172. But I was putting money in the bank each and every month. Again the trick to buy the right airplane at the right price and not to get greedy. yes there were the calls at 9 in the evening: i'm up in Bridgeport Connecticut with a dead battery. What should I do?" or "I just came out to fly the airplane and the last pilot left the %&$@##&( master switch on and it now has a dead battery." Ah, the troubles of being a business owner. You'll need to scrutinize the folks you rent to with the utmost of care as they can profoundly affect your costs by how they take care of YOUR airplane. But it CAN be done if you do it smartly.

The bottom line is, if you can't afford the airplane you want to own outright then you should not buy it.

Good luck. I'd be happy to elaborate on any of these issues if you wish.

Planeflyr

 

Rob,
I'm not positive, but I don't think that would work out well for the following reasons.
You'd have to be a 135 company to hire out the plane, Lots more regulations.
and to have it used by a flight school would requirea good outlay for insurance,
Plus to teach in one you have to have it inspected by an A.P every 100 flight hours. That's approx every 3 weeks on avg. if not sooner.
Plus people aren't going to take care of it. ....."Aww it's just a rental"

People do lease back airplanes, My school has a bunch of them.
Yeah, they're safe to fly, but the upkeep is horrendus!

It will get beat up very quickly. Hard landings, side loads. Shock cooling
.....can ruin an engine fast.... improper leaning, overheating, low on oil,
and rebuilt engines aren't cheap.


So you don't renew the upholstery when it gets torn, the rugs are filthy/torn/frayed, Plastic panels cracked/broken, windshields scratched cause someone cleaned the bird droppings with a Brillo pad.... Wingtips crack wings get hangar rash.... dented.... bent, tires get worn out, every couple weeks and all the time it's in the shop, it isn't making any money.

Then there's the people that come along complaining that this don't work like new, and the radio sounds like crap, the glare shield is raggy, rear plexiglass is opaque from UV damage, I can't transmit.... Recieve.... and the problem is their headset, but you have to have it checked out due to the regs....along with the instruments that have to be certified every so many hours....





Hmmmm! I think I'll run out and by me a plane to lease back tomorrow...








...........................NOT!!!






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edit:
Whoa! I see I have to type faster around here....

 

Rob you may want to find a local flying club. Here is the one I just got approved as their first outside instructor

http://www.arizonacloudbusters.com

They all have a stake in the planes and you could probably at least break even. They seem to take pretty good care of the planes

airfreddy