201j club/rental

[Etz]

Thinking of putting. my Money in a non equity club here  in North Atlanta .  I.e For or five guys pay a monthly dues that allows access to the aircraft. Then there is just a straight  hourly fee.  The monthly fees cover insurance, maintenance, nav data and such.  Thoughts?  Anyone in a usage group like this?  

[gsxrpilot]

25 minutes ago, Etz said:

Thinking of putting. my Money in a non equity club here  in North Atlanta .  I.e For or five guys pay a monthly dues that allows access to the aircraft. Then there is just a straight  hourly fee.  The monthly fees cover insurance, maintenance, nav data and such.  Thoughts?  Anyone in a usage group like this?  

@Bryan

[kortopates]

I can share what I have seen work in my area. I work with probably the largest non-profit non-equity club in the country and also instruct for some equity clubs and have also worked with small non-equity clubs that aren't really clubs but rental arrangements. I have only seen equity clubs share fixed operating expenses via monthly dues, non of the non-equity clubs have worked that way. I've seen two approaches to the non-equity side. First and most common for an owner adding a non-equity renter is to have the renter pay the their fare share to be covered for the year or remainder policy period. Then the hourly rate reflects a pro-rata share cost of the fixed and hourly operating cost. The obvious reason for not putting all the fixed cost expenses into a monthly dues is that majority of renters will not want to pay more than their equivalent share based on hours operated. Splitting all cost equally when the operating hours are far from equal isn't a popular approach. So instead all clubs I know have very limited monthly dues. The exception is  equity owner partners that are buying an equal share in the aircraft and expecting to get an equal share in access to the plane. But even that doesn't appear to be the norm for equity partners either  but not entirely un-uncommon.

You most likely don't need to start with a full on club either, which requires much more expensive insurance to allow adding and removing club members with a just a completed club application form. But starting out real small you can keep insurance cost affordable by just paying to add one or two renters as named insured to your policy; paid by the renter. I expect that when you inquire about a real club policy that you'll find the insurance is cost prohibitive until you have enough renters lined up ready to pay it. Starting out small though you should find you can get by with just a few long term named pilot additions that at least insurance cost won't frighten away prospective renters. I've been told different underwriters allow different numbers of limited named insured on a policy but none allow more than a handful till they require a more expensive club policy. If that would work, then you can come up with an hourly rate, wet or dry, to help spread all the plane expenses based on usage. 

 

[carusoam]

Etz,

It may help to explain what you are expecting to get from your arrangement...

Having four or five people share the plane during the week is great...

I usually want to have the plane for the weekend... every weekend... 

Best regards,

-a-