Cost of ownership "budget"

[RobertGary1]

1 hour ago, M20Doc said:

I thought that you guys get to write off interest against income? If so why not finance a portion and get a better airplane?

Clarence

Not for private ownership but I hear you guys pay sales tax on real estate.  

 

-Robert

[DXB]

18 minutes ago, neilpilot said:

Assuming cheap ($3/gal) gas, and 10 gal/hr fuel burn it seems that you are only flying 20 hour/year.  If that's the case, then your out of pocket flying is costing about $340/hr.  Maybe you need to fly more or get a partner? 

In 2016 87Q was flow 160 hours.  Maintenance included a cylinder, AP elevator servo, nose truss replacement and ADS-B install.  Our costs were as follows:

Like Nielpilot, I also fly the "cheapest" bird in the fleet and generated total costs very similar to his over the last year.  I flew a bit less (100-120hrs), spent more on hangar, a tad less on maintenance, differing amounts on the sundries, but all told 20-25k is about right. Only realistic way for me to save significantly would be to get an A/P license. I do my own very basic maintenance (oil/filter, clean/rotate/gap plugs, borescope checks) but don't have time to do more. Now that my plane is up to snuff in most ways, I am budgeting 20k per year going forward plus 25k saved for the fateful day when overhaul comes.  In relation to these recurring costs, the plane purchase itself is insignificant.

[Yetti]

I fly about a 100 hours a year for the first 2 years.  Maybe I am low in gas costs.    I have a brand new cylinder sitting in the box ready to go.

[Guest]

54 minutes ago, RobertGary1 said:

Not for private ownership but I hear you guys pay sales tax on real estate.  

 

-Robert

No sales tax on real estate, no capital gains on my primary residence, no annual property tax on my airplanes.

Clarence

[bradp]

These budgets are in line. Please please please put the thing in a hangar.  It pays for itself over time with 1) the appearance of hangar elves, 2) protection from the elements and 3) other perks like the elves’ household items can be stored and save $250/month on storage in a seedy location. 

If the idea of a hangar will blow the monthly budget then group ownership or club participation may be the way to go initially.  The utility of being able to pick up and go is why most went with the sole ownership route rather than clubs or partnerships.  I like being able to just get things done without the pain of haggling about expenses.   

Example - last night I had to explain to the wife what an AMU is.  First world problems indeed.  

[DXB]

Don’t forget the extra money spent on food, lodging, recreation at all the fun destinations you’ll start going on  weekends.  Otherwise you’d have just stayed in the house, eaten ramen noodles, and watched reality tv - a much cheaper proposition .  I have not factored in these costs  and choose to stay in denial for now.

[neilpilot]

1 hour ago, DXB said:

Don’t forget the extra money spent on food, lodging, recreation at all the fun destinations you’ll start going on  weekends.  Otherwise you’d have just stayed in the house, eaten ramen noodles, and watched reality tv - a much cheaper proposition .  I have not factored in these costs  and choose to stay in denial for now.

Actually, when I fly Mooney I can typically save 1-2 days of food and lodging over a comparable drive.  Not to mention a time saver.  My time used to be worth something, until I retired.  So I figure I can save a few hundred per trip by spending 1-2AMU going Mooney.

[J0nathan225]

On 11/16/2017 at 8:21 AM, Raptor05121 said:

Hey Jon,

Sorry we didn't get a chance to meet up. Any idea when you will be back? I'm still game to finding a day to get out that way.

I'm also averaging about $15k a year for 200hrs of flying. That has included my pop-up expenses that left me grounded for a month here and a month there. My biggest "I wish" is instrumentation. I keep pining after a Garmin 430W, but to install one would be 100% of my plane's value. Be sure to find a model kitted out with what you want. Previous installations will lose 50% of their value when they sell- their loss is your gain.

I won't be back till late June or possibly sometime in July. I PCS in August to Rucker though that's probably about the same distance for you versus SAV, hopefully we can link up before I move though.

__________________________

It seems like my budget is fairly accurate, though some ~100 hour C-E owners are listing 25K+ annually, I think that may be the case on years with upgrades and/or abnormally high MX years. The comments to take my income after bills and that's what my plane fund will be may end up being the case some months, but if my initial plan required all of my discretionary income I don't think it would be wise to purchase a plane. Planning for 15K+ in reserve initially, some said 10k+, seems like a safe bet so I don't end up paying for a large paper weight that is unable to fly. I also understand a PPI at a MSC will help prevent this too.  As for a hanger, I agree that is the better option and I will attempt to secure one, but with the short stays for the next few years of my career I want to have a "decent" plan when a hanger is not available. I certainly hope to help with annuals to cut MX costs and I should have no issue with most of the FAA approved owner level MX either.   

I was also looking at a Flight Design CTLS to just fly around in, please don't let me do that to myself. I plan on doing a decent amount of X-country and an IFR capable platform makes more sense, though the low level scud running I'm occasionally doing out here under goggles certainly helps make me a better MVFR pilot, anyone familiar with ICAO SVFR? I sure am. Crunching the numbers acquisition costs are ~2x a M20C, but the MX and fuel costs are cut in half or more which means long term ownership has the CTLS coming in much cheaper. 

I appreciate the comments and advise, I'm a firm believer that learning from others experiences prevents foolish or headstrong mistakes on my end...sometimes.

[Marauder]

12 hours ago, neilpilot said:

Assuming cheap ($3/gal) gas, and 10 gal/hr fuel burn it seems that you are only flying 20 hour/year.  If that's the case, then your out of pocket flying is costing about $340/hr.  Maybe you need to fly more or get a partner? 

 

In 2016 87Q was flow 160 hours.  Maintenance included a cylinder, AP elevator servo, nose truss replacement and ADS-B install.  Our costs were as follows:

 

12 hours ago, DXB said:

Like Nielpilot, I also fly the "cheapest" bird in the fleet and generated total costs very similar to his over the last year.  I flew a bit less (100-120hrs), spent more on hangar, a tad less on maintenance, differing amounts on the sundries, but all told 20-25k is about right. Only realistic way for me to save significantly would be to get an A/P license. I do my own very basic maintenance (oil/filter, clean/rotate/gap plugs, borescope checks) but don't have time to do more. Now that my plane is up to snuff in most ways, I am budgeting 20k per year going forward plus 25k saved for the fateful day when overhaul comes.  In relation to these recurring costs, the plane purchase itself is insignificant.

I am glad to see people provide real numbers on these costs. I personally feel it is a disservice to folks looking to own not to be realistic about the cost of ownership. I am currently working with a friend who wants to buy a Piper or Cessna. He is the ultimate of Cheap Bast#$ds and I am trying to let him know that you really can't cheap out on owning an airplane. He has a hard time understanding that the Iridium spark plug purchased at Wally World for $5.93 for his car is going to cost him $25.95 for a massive for an airplane. 

I rented for 3 years. It cost me more initially because of the rental rate and the associated minimums for overnight/multiple night rentals. But I didn't need to spend $800 on spark plugs.

[Marauder]

14 minutes ago, J0nathan225 said:

I won't be back till late June or possibly sometime in July. I PCS in August to Rucker though that's probably about the same distance for you versus SAV, hopefully we can link up before I move though.

__________________________

It seems like my budget is fairly accurate, though some ~100 hour C-E owners are listing 25K+ annually, I think that may be the case on years with upgrades and/or abnormally high MX years. The comments to take my income after bills and that's what my plane fund will be may end up being the case some months, but if my initial plan required all of my discretionary income I don't think it would be wise to purchase a plane. Planning for 15K+ in reserve initially, some said 10k+, seems like a safe bet so I don't end up paying for a large paper weight that is unable to fly. I also understand a PPI at a MSC will help prevent this too.  As for a hanger, I agree that is the better option and I will attempt to secure one, but with the short stays for the next few years of my career I want to have a "decent" plan when a hanger is not available. I certainly hope to help with annuals to cut MX costs and I should have no issue with most of the FAA approved owner level MX either.   

I was also looking at a Flight Design CTLS to just fly around in, please don't let me do that to myself. I plan on doing a decent amount of X-country and an IFR capable platform makes more sense, though the low level scud running I'm occasionally doing out here under goggles certainly helps make me a better MVFR pilot, anyone familiar with ICAO SVFR? I sure am. Crunching the numbers acquisition costs are ~2x a M20C, but the MX and fuel costs are cut in half or more which means long term ownership has the CTLS coming in much cheaper. 

I appreciate the comments and advise, I'm a firm believer that learning from others experiences prevents foolish or headstrong mistakes on my end...sometimes.

I don't want to see you in a CTLS either! But I don't want to see you be one of those guys who buy a plane and then can't afford to operate it. We have seen a few of them over the years on this site.

I am a 26 year owner of the same plane and have kept detailed spreadsheets since Day 1 (ah, what happened to those days when AvGas was $1.25 per gallon?). I fly between 120 to 180 hours a year. On a good year, nothing breaks and I am on the lower side of the $20k range. On a bad year, I'm paying $1,500 for new spark plugs and a wiring harness, spending money to fix a radio problem or an annual that is double my normal expected cost. The upgrades and engine reserves I keep can be eliminated if you have plans on selling before either is needed. If you plan on owning the plane for a while, you really should factor them in. People often asked me how I funded my avionics upgrades -- simple, I budgeted for it by setting aside money for every hour I flew. My first upgrade after I did the autopilot in 1998 was in 2012 when I joined the world of GPS and glass cockpits. I saved for 14 years to have the funds to make that happen. 

If you can do some of the maintenance yourself (as I did for the first 7 years of ownership) and can do owner assisted annuals like raptor above can, you will lower your costs. If you are 5 thumbs and have a hard time with "lefty loosey, righty tighty", you will need to pay for someone to do those things for you.

I wouldn't sugarcoat the costs. Keep in mind that a number of owners here are, er, ah, on the dinosaur side of evolution (myself included) and have worked for years to have the financials means to own a plane. When I bought my Mooney, I was making less than I pay today in taxes. So, it can be done but you need to go into it with your spidey senses on full alert.

[Mooneymite]

3 hours ago, Marauder said:

Keep in mind that a number of owners here are, er, ah, on the dinosaur side of evolution (myself included) and have worked for years to have the financials means to own a plane.

I don't know about other dinosaurs on here, but I began airplane ownership as my kids were finishing up college.

Frankly, aircaft ownership is MUCH cheaper than tuition/college.  Buy $175 worth of avgas?  Think, "one textbook".  $14,000 annual?  Think, "one semester tuition".

And aircraft ownership does not involve mandatory liberal-indoctrination!

What a bargain!  

[Skates97]

I'm still not quite sure why college tuition for kids comes into play... My kids knew that if they were going to college they better get good grades in high school and test scores to receive scholarships. If not then they were going to learn how to be a poor college student and work their way through school.

I haven't added up my costs through my first year (11 months) of ownership. Here are the rough ones:

• Loan - $233/mo
• Hangar - $400/mo (Like others I consider this a necessity)
• Insurance - $1525 (I had zero complex/retract hours, under 60 total hours, renewal after passing 200 total and 140+ in type came back at $1005)
• Fuel - $6,300 (Approximate, I haven't catagorized everything in Quicken yet but that would be 140 hours, 10 gal/hr, and $4.50/gal)
• Shoulder Belts - $1,000 (Some might consider it optional but I considered this a necessity. I did the install and I think paid my AP/IA $20 to look it over and sign it off.)
• Oil changes - $240 (Approximate, $20 filter plus oil, I did them myself, three oil changes)
• 500 hr Mag Inspection - $1375 (They were at about 430 hours when I bought it)
• Misc - $2000? I have not kept track of little things here and there on the plane
• That puts me right about $20,000 and does not include the first annual that is due next month

To that you can add in some other stuff that was completely optional. I just had an EDM830 installed this week and I have a used SL40 going in next week to replace the Narco Escort II that was my #2 Nav/Com. I just fly VFR but plan on putting in a GPS/Nav/Com next year and starting on my IFR which will add to the bill.

Contrary to some advice I bought the plane even though I could not have afforded to pay cash for it, nor pay cash to put an engine in it. I could if necessary do that using a home equity line of credit if needed. I looked at my finances and decided that I could afford $1,500 or so a month to chase down the dream of flying so I did it. I can't put a price on the memories and experiences that we have had since owning the plane, which I guess is why I don't really keep track of expenses to the penny.

I am blessed to have a wife that not only enjoys the plane but encouraged me to get it. She also has never had any concerns about upgrades if it is to make things either safer or more enjoyable. She just flew commercial to UT to visit grandkids this week and was really wishing she was in our plane instead of wasting time in the terminal and then getting crammed into a seat next to whoever. It cracks me up when people say our planes are cramped inside, there is more room than flying coach class, even in the back seat of a short body...

[Mooneymite]

46 minutes ago, Skates97 said:

I'm still not quite sure why college tuition for kids comes into play...

Because this is Mooneyspace....thread drift is normal.  

[Skates97]

2 hours ago, Mooneymite said:

Because this is Mooneyspace....thread drift is normal.  

No, I'm saying I don't understand what kid's college tuition has to do with whether or not I can afford a plane... I'm not paying their way... 

[bradp]

7 minutes ago, Skates97 said:

I'm not paying their way... 

Then you are a CB just like almost everyone else on the board.  ;-)

[BKlott]

I think there are advantages to paying cash for your airplane and having a minimum of $30,000 in liquid reserves available so that if you get caught with the engine job right off the bat, you can afford to get it and done properly. That is about the worse case scenario for a new owner.

I have seen people buy airplanes that they really cannot afford to own, operate and maintain. One example stands out with a guy who needed to finance the purchase of his airplane. He has a loan payment, hangar rent and insurance bill before he even gets off the couch at home. One of his wing tanks started leaking so he just stopped using that one as he couldn’t afford to get it fixed properly. Later on the other tank started leaking which led to a very expensive repair bill. He ended up financing those repairs. Not long after that was done, he had a bad vibration in his engine. After inspection, it was overhaul time. That plane has not flown for more than a year while he is scrounging for dollars to pay for the overhaul job. It is a sad and expensive cycle to witness.

Others will disagree, but for the average guy, I think that if you cannot afford to pay cash for the airplane, you probably cannot afford the airplane in the first place. The sad truth is that you would be better off renting and walking away from the problems and costs of ownership.

There are also owners that don’t spend a nickel on the airplane that will tell you how affordable it is to own one. Their plane will have a thirty to forty year old faded and chipped paint job on it, a ragged out interior, crazed glass and avionics that the Smithsonian is looking for. They don’t stop to realize that the airplane’s value has diminished beyond the point of economic repair. Unfortunately, our airports are littered with examples of this type of ownership.

Owning an airplane is one thing, operating and maintaining it are a whole different story.

 

 

Edited November 18, 2017 by BKlott

[Jim Peace]

2 hours ago, BKlott said:

There are also owners that don’t spend a nickel on the airplane that will tell you how affordable it is to own one. Their plane will have a thirty to forty year old faded and chipped paint job on it, a ragged out interior, crazed glass and avionics that the Smithsonian is looking for. They don’t stop to realize that the airplane’s value has diminished beyond the point of economic repair. Unfortunately, our airports are littered with examples of this type of ownership.

Owning an airplane is one thing, operating and maintaining it are a whole different story.

 

 

So true......great post

to the original poster........if you can't pay cash for the airplane in the first place then do not buy it......I am not saying to not finance but lets be real here.  It is just a toy and toys should not be financed, especially lawn mowers with wings.  Also I only own a C model and let me tell you if taking a hundred dollar bill and setting it on fire every other day would bother you then do not own a plane....

Also it is nice to see that you planned a budget but I can tell you that year after year the budget gets blown away so much so that I do not even have one anymore.  It is what it is and thankfully I have a career that covers everything.  I am however very anal with mx so I enjoy 100% dispatch reliability and can and do fly coast to coast in a 53 year old plane.

Edited November 18, 2017 by Jim Peace

[Andy95W]

I agree with Jim.  I would never fault someone for taking out a loan on an airplane, but if you can't swing it without the loan, it might be too much airplane for you.

The one exception I see is for an airplane that you actually NEED for business and can write off the commensurate expenses accordingly.  If you don't need it for your work, it's a toy- and a toy that is one corrosion inspection or metal-found-in-the-oil filter from ruining you if you took out too much of a loan.

[TheTurtle]

I financed because my wife would rather see a couple hundred bucks a month go out rather than get off X thousand worth of nest egg.  interest rates for planes kind of suck at 6ish % using a plane financer.  Your bank is probably better if they will do it.  No pay off penalties on mine so I overpay every month.  Now that things arent breaking on a monthly basis Ill probably just pay it off.

 

[Niko182]

18 hours ago, bradp said:

These budgets are in line. Please please please put the thing in a hangar.  It pays for itself over time with 1) the appearance of hangar elves, 2) protection from the elements and 3) other perks like the elves’ household items can be stored and save $250/month on storage in a seedy location. 

If the idea of a hangar will blow the monthly budget then group ownership or club participation may be the way to go initially.  The utility of being able to pick up and go is why most went with the sole ownership route rather than clubs or partnerships.  I like being able to just get things done without the pain of haggling about expenses.   

Example - last night I had to explain to the wife what an AMU is.  First world problems indeed.  

what is an AMU?  relatively new here and never heard the term, except for Atomic mass unit, which doesn't seem to be right in this case.

[Guitarmaster]

what is an AMU?  relatively new here and never heard the term, except for Atomic mass unit, which doesn't seem to be right in this case.

Aviation Monetary Unit = $1000


Sent from my XT1585 using Tapatalk

[Jerry 5TJ]

 

Just now, Guitarmaster said:

Aviation Monetary Unit = $1000

Use example: “I got a great new interior installed for only 11 AMUs!”

Then you move up to TAMU:

TAMU = Turbine Aviation Monetary Unit = $10,000

Use example: “I got borh hot section inspections for only 6 TAMUs!”

 

[Raptor05121]

I might be one of the few that disagree here. I'm 26, looking to build hours so I can get my IFR, commercial, and start flying for money. My rationale is I need hours quick and convenient (the nearest rental is 45 minutes away and was hard to get a bid on it with other students). So I took out a personal loan (no lienholder), and put down 25% cash. I got 0% APR for 24 months and a decent rate thereafter. I'm down to 25% payoff after 2 years of ownership and I should have it paid off this time next year.  In the time I will have my plane paid off, I will have flown close to 400 hours at this rate and should have my instrument and commercial done. If I had just saved cash, I would be 3 years behind the ball. All for maybe $800 in interest? Yeah I'll pay that. 
 

[Mooneymite]

4 minutes ago, Raptor05121 said:

I might be one of the few that disagree here. I'm 26, looking to build hours so I can get my IFR, commercial, and start flying for money.

I agree that this is a good use of credit since it is an investment in a future career.

If your sights are set on the airlines, your timing is good.  Delta has 1200 retirements next year.

[Raptor05121]

Eh, not really feeling the airlines. Tow banners, maybe get my CFI, etc and then get into Citation, King Airs, 135 or 91. I'd be happy. I've got no interest in fleeting through TSA and flying cattle cars between the same airports 5 times a day.