Plane Ownership Advice


#1

The Cessna 152 that I rent from the local flight school is up for sale. She ain’t exactly pretty, but she flies well. No accident reports on file. The engine has 1,100 hours left on it and it’s full IFR certified. I think the price of $15,000 is a steal! The lowest price of a 152 on ASO.com is $26,900. Your thoughts about the plane/price are welcome… (questions, comments, advice)

The plane is rented from the local flight school through a lease-back arrangement. The plane rents for $59/hour wet and the owner gets 80%, but is responsible for gas, oil and maintenance. With the price of gas at $4.50/gallon here, I figure about $20/hour income. That’s $1,000 for every 50 hours. Tiedown at the airport is $70/month. The current owner says he pays $3,500/year insurance. While I doubt that I’d actually MAKE any money from this arrangement, it would help offset tiedown, insurance, and other expenses. Then again, the plane would see a lot more wear-n-tear requiring more frequent maintenance and inspections, etc. So, what are your thoughts on this kind of arrangement? Anyone know of any nightmare stories about lease-backs?

Any other thoughts that come to mind would be appreciated as well…

Edit:
I know I’m gonna have to start an LLC corporation if I’m gonna lease the plane. If anyone has any tips on how to get the ball rolling with that…


#2

If you are an AOPA member, they give you free VRef calculations of aircraft value. If you aren’t, post the TTAF and time since major overhaul plus avionics (just the major items like GPA, autopilot, etc.) and I’ll get it for you.

In general, I agree with you that you probably won’t make money on this deal, but (if you are lucky) you may cover some of your fixed costs. I’ve had friends who have done leasebacks and they have seen some damage to their planes. The key question to me is whether you want to worry about what some student has done to your plane every time you plan to go out and fly.

As for the LLC, my advice is to get a very experienced aviation attorney (AOPA has some listed). An LLC may or may not give you the liability protection that you want - the devil is in the details and an LLC is only part of the equation. If a student crashes your plane and there is injury/death and/or property damage, you can count on an attorney trying to “pierce the corporate veil” and come after your personal assets. If things aren’t done properly, they will succeed.


#3

Thanks, CAFlier. The VRef feature is a nice perk with AOPA membership. Two major price factors are the paint and interior. No question about it, the interior of the bird is rather “old” to put it nicely. It would fall in the category of needing a new interior which reduces the value considerably. Not sure if it NEEDS paint though, I think it just needs a good wash-n-wax job.

Is there a “fine line” determinant as to whether or not the plane needs a new paint job?

I don’t see any rust stains streaming from any of the fasteners, though some of the paint has flecked away from some of the screw heads. IIRC there are some cracks in the front of the engine cowling paint. If it truly “needs paint”, then that would make the price much less of a steal than I thought it was… :frowning:


#4

It will probably pay for your flying. My club owns its 152 but the 172 and 182 have been on lease back programs for 15+ years. Those owners wouldn’t still be doing that if it was a big looser. Also, you don’t have to overhaul an engine at its TBO. Most will go 2500-3000 hours with proper maint.

I’ll have to look at the 152 but I think that cowl is fiberglass and subject to cracking and peeling. You can have that cleaned up and painted giving your plane a much nicer appearance.


#5

Good start!

[quote=“NeedleNose”]

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is $26,900. Your thoughts about the plane/price are welcome… (questions, comments, advice)

Price seems reasonable enough. Have you flown it? If so, how about getting a third party pilot to fly it to give you an objective opinion on flying it? I took my CFI up in my plane figuring to tap into his 40+ years experience.

Remember, the insurance is based on the fact it’s used for commercial ops. Once you buy it and use it for private use, that price will go down exponentially. As a benchmark, I pay $975 on 50K hull for my Sundowner. My tie down is $50 and I think your math may be a tad high for fuel? I figure on my at 10 gph, and I fly about 20 hours per month runs about 800 a month at about $4 per gallon. For you, at 5 gph, should be 400 per month if I did my math correctly. Oil changes are every 3 months give or take at $175.

If the plane was well maintained during it’s 100 inspections, to be honest, only thing you will be putting in is liquids (oil and gas)

Prebuy will obviously be in order.

Don’t know anything about leasebacks, but I would steer clear of the word lease. It’s your plane and you want others banging it around in their training?

Now, more questions… What’s your plan with this plane? 2 seater doesnt’ allow much for passenger considerations. Do you plan for lots of time in the clouds? Does it have 2 nav and coms to ease the workload while in the clag?

Personally, I waited til I could afford a 4 place only because I wanted more comfort while slogging along at 110 knots and not have to worry about weight and balance issues or having to worry, human meat or fuel gets left behind.

Allen


#6

I was at a meeting today with a guy who had his new glass panel 172 on a leaseback. His insurance company will be buying him a new new plane after his old new plane was totaled by a renter during a lesson. He said that he will not be putting the new one on leaseback.


#7

I would never ever buy a plane that has been used by a flight school. Normal use, takes off, fly gently and land after average of 1 hour.

Flight schools take off lands, take off, hard lands, take off, bounces, does 10 touch and go’s in an hour, while in the air they do power off, power on, power off, stall, power on… spin etc… no way i would buy a plane who has been used like that!!!

If you wan’t to make money, take your 15k$ and invest it, in stocks or whatever, but not in a plane to rent out…

There are so so so much planes for sale that are from an owner who took really good care with it. Owning a C152 in my opinion is a bad idea, it’s made to train people, it will bore to death you after a while…

If it’s such a good investment, why don’t they buy it themselfs/or keep it…


#8

On the contrary, if the school is reputable and kept up with the 100 hour inspections, I’d be more inclined to buy a plane from there then from a once a blue moon weekend flyer who may take shortcuts in maintenance to lower the cost of ownership. Been there done this with my Sundowner, so I talk from experience.

School plane has proven it’s durability, and been maintained via the 100 hour inspections (note my word reputable in my prior paragraph!). Things are well lubricated and used and less likely to break then an underutilized airplane.

Needlenose has not said what his intention of using the plane yet, so I just wouldn’t discount a C152.

If all he is going to do is bore holes in the sky, and maybe take a passenger up for the entertainment of flight, to see their house from the air, then a C152 is all he needs.

If he intends to do some serious XC’s on a REGULAR basis, take more then an occaisional passenger, then he may want to re-evaluate.

Bottom line is a C152 just may be a good idea, depending on his flying needs. It’s a reasonably (by aviation standards) cheap plane, common parts and just plain fun to fly.

Allen


#9

On the contrary, if the school is reputable and kept up with the 100 hour inspections, I’d be more inclined to buy a plane from there then from a once a blue moon weekend flyer who may take shortcuts in maintenance to lower the cost of ownership. Been there done this with my Sundowner, so I talk from experience.

School plane has proven it’s durability, and been maintained via the 100 hour inspections (note my word reputable in my prior paragraph!). Things are well lubricated and used and less likely to break then an underutilized airplane.

I do absolutely not agree, the 100 hour inspection has nothing to do with the load these kind of planes receives during training!!! And it’s the plane who needs to carry to load… on and on… it will just break earlier, and 100hour inspections will not prevent this!!

About the maintenance, buying a used plane always needs for a good research about the underutilized plane, i change my comment to:
’ there are loads of used planes who are always hangered, well maintained and equiped, gently and regulary used and damage free for a very good honest price’

I did logged some hours during my training in a C152, while it kept me so far from dying it’s just a good trainer and that’s it. Boring holes in the sky with only 1 passenger will bore you to death soon, if that is your intention you better keep renting one in my opinion!!!


#10

I’m just curious, do you own a plane???

Do you know EXACTLY what process is taken during a 100 hour inspection?

Yes as you describe, crap happens, metal fatique is not part of a 100 hour inspection. At least the plane is regularily being looked at as compared to a private owner.

If you are purchasing from a school who is reputable AND matched up with a good A&P, I’d put my life in that plane. Plane has proven it’s durability and less likely to have parts break as compared to a plane that has sat on the ramp and flown intermittently.

Don’t get me wrong, I see the points you are trying to bring across, but there is the theory world and the real world. I am speaking from real world experiences

I don’t think there are any statistics to say buying a school plane is less safer then buying from a private owner. If you have such statistics, I am always willing to be proven wrong.

Good paint and good upholstery is always good eye candy, that’s the only thing a hangar does for the plane. Oh ok, it does reduce the ambient temp for components when sitting on the ramp so yeah, hoses may last longer providing the dry rot don’t set in from underusage…

Define regular? Once a week, once a month, once a year? Most owners that I observe at my own airport dont’ fly but once or maybe 2 times a month, if that and I am being generous. Plane sits on the ramp (or hangar) beckoning to be flown. Kinda sad to see IMHO

Agree with only the fact that if you intend to fly very infrequently, then it pays to rent, other then that, not everybody has the same flying habits as you.

What may be boring to you, just may be a thrill to others. Sometimes, just the magic of flight is enough thrill for me, and I been flying for 750+ hours. Sharing the fantasy of flight is quite a thrill even if I have spent 100’s of hours in the same block of air time over time.

Allen


#11

No, i’m planning my purchase after i receive my IR, i’m doing my training at this very moment now, i hope to get it next year.

Do you know EXACTLY what process is taken during a 100 hour inspection?

I know that the load that these planes receive isn’t checked enough !!! That would take some X-ray scans i guess :frowning:

I don’t think there are any statistics to say buying a school plane is less safer then buying from a private owner. If you have such statistics, I am always willing to be proven wrong.

Ofcorse i don’t have that, we need more statistics about everything in our world… but we have only a few…

Define regular? Once a week, once a month, once a year? Most owners that I observe at my own airport dont’ fly but once or maybe 2 times a month, if that and I am being generous. Plane sits on the ramp (or hangar) beckoning to be flown. Kinda sad to see IMHO

I would say once a 3 to 5 times a month…

What may be boring to you, just may be a thrill to others. Sometimes, just the magic of flight is enough thrill for me, and I been flying for 750+ hours. Sharing the fantasy of flight is quite a thrill even if I have spent 100’s of hours in the same block of air time over time.

the aim of my post was to let him think about:

  1. buying a plane from a club contains alot of unnessecary risks, the chance that the heavely used plane contains hidden defaults is higher IMHO than from a regular owner, that is just commen sense, knowing how students learn to fly with a plane (if i look to myself!)
  2. the business model of renting out your machine to a flying club doesn’t work, it’s not because some people do it for over 15 years that it’s working good
  3. is a C152 wich is made to be a TRAINER really a good choice for him ? I know a few people who owned a C152 and moved on to a bigger plane shortly after ownership, you RENT a C152 you don’t OWN one…

#12

sounds cheap - and good for buzzing around, but it will never pay for itself since my local FBO charged $90 an hour wet - and they are barely breaking even on it with the maintenance and insurance reserves.

Insurance to rent it will be $10k a year - minimum. Remember - it is a commercial and not a private use.

It then needs 50 and 100 hour inspections along with the annual.

You will need a new engine next year or the year after.

You have student pilots pranging it into the ground day in and day out

The interior gets worn very fast, or faster. You may not have the availability you want either - since lots of instruction happens on the weekends.

Hamfisted pilots break things - like avionics knobs and button, scratch and crack plastic pieces, scratch windows, - have priced a new screen for a KX-155 lately?

If you are ok with subsidizing the airplane, then by all means.

If renting back airplanes paid off, every flight school in America would have dozens of new models of Skyhawks, Warriors, Diamonds and even Cirrus. It just does not pay.


#13

NeedleNose,

I would certainly look at Vref, but I wouldn’t buy a plane based on the valuation that it spits out. Vref is a mere guideline, but doesn’t evaluate the specific aircraft. It is just the same with Bluebook. They are both run and operated by publishers, not aviation professionals. Alternatively, I would go for a NAAA certified aircraft appraisal. A certified appraiser, who is a trainer aviation professional, will conduct a thorough investigation of the specific aircraft, looking at airframe, engine, prop, instrumentation, avionics, interior, logbooks, FAA documentation, NTSB documentation, etc. S/He will produce an appraisal that is thorough, specific, and complete detailing the highlights and the lowpoints of the aircraft. S/He will then come up with a computerized current market value based on what these planes are really selling for in the market today.

That brings up another point. Do you know where Vref and Bluebook get their “value” data? They send out surveys to the Dealers and Brokers out there. Now if you were a Dealer or Broker, and you got a survey asking what aircraft did you sell and how much you sold it for – and you know that potential clients will be looking at that guide for information – are you going to slightly overstate what you sold that aircraft or bought that aircraft for – you betcha. Unlike Vref and Bluebook, the NAAA doesn’t work like that.

And, in case you are wondering, and in the case for full disclosure, yes, I am a certified appraiser. I am NOT offering my business here for a multitude of reasons; however, I think that you would be better served in your endeavor if you took advantage of a NAAA certified appraisal. If you want help finding an appraiser in your market, please let me know – I would be happy to help.

Chris


#14

I simply can not imagine doing a formal appraisal on a $15,000 aircraft . . .

but westward makes alot of sense!


#15

NeedleNose…ask yourself this question…What type personality are you?..Users of an airplane like this in a leaseback training situation will not always treated it with…respectful regard…shall I say.