Club vs Buying Debate

[paulsalem]

I’m doing the buy vs club debate. I’m looking for an IFR capable 4 seat go somewhere airplane. My local club has 2 SR20s which other than FIKI is perfect for me. But if it likely makes sense financially I’d rather buy a plane (or get into 1/2 or 1/3 partnership).

Estimate of 75-100 hours / year.

Mission: 350nm with 400lbs payload (3 pax  + bags including growing 4 year old). This would be my first airplane purchase so I’m sure there is a lot I don’t know, hence the post here.

Below is what the local club would charge me based upon 50/75/100 hours per year. This includes the monthly dues but not the $4,500 buy in ($2,500 refundable upon exit).

Times are Hobbs wet

• 50hrs - $8,480 | $170 / hr
• 75hrs - $11,730 | $156 / hr
• 100hrs $14,980 | $150 / hr

Any advice would be appreciated. Thanks!

[Andy95W]

Welcome, Paul Salem.

It really doesn't make sense to buy an airplane on your own  other than for convenience or just because you love owning your own airplane.  Here are some fixed costs, you can figure yours from there.

-You should probably figure $2,000/year for insurance (but figure $3000 for the first year).

-You should probably figure $5,000/ year for maintenanc, including annuals (but figure $10,000 for the first year).

-You should probably figure $3,000-6,000/ year for hangar rent, depending on your area.  You don't have to hangar it, but you'll be glad you did.

-Don't forget sales tax/Use tax for your state.

Good luck, keep us posted.

[Bob - S50]

Our J with 4 of us costs me, based on $5/gallon, 10 gph,  $250/month, and $30/hour tach time dry:

100 hours/year: $110/hour

75 hours/year: $120/hour

50 hours/year: $140/hour

[paulsalem]

Just now, Bob - S50 said:

Our J with 4 of us costs me, based on $5/gallon, 10 gph,  $250/month, and $30/hour tach time dry:

100 hours/year: $110/hour

75 hours/year: $120/hour

50 hours/year: $140/hour

What reserves are included in that $250 / and $30

[Bob - S50]

25 minutes ago, paulsalem said:

What reserves are included in that $250 / and $30

With four of us paying we have $12,000/year for fixed expenses: $2000 insurance, $3000 hangar, $3000 annual.  Leaves us $4000 for subscriptions/registrations and fixing or replacing stuff that breaks.

$30/hour broken down into about $1.50/hour for SB282 'no back clutch spring'.  About $5/hour for oil changes.  $2/hour for magneto 500 hour inspection. That leaves a bit over $20/hour for engine and prop overhaul.

[paulsalem]

That sounds awesome Bob.  Very reasonable.

[carusoam]

Clubs are nice, but...

Ownership allows you to take your family away from the big city every weekend... No scheduling required...

The beach is a half hour flight... makes a great Saturday....   the plane sits idle and nobody cares...

Show me how I can fly a club plane like this...
 

It turns out There are certain times of the year or week... that are really popular for flying...  If your vacations and weekends are the same as 90% of other people... this can be a drag on the schedule...

If your regular job includes working weekends... and vacations aren’t on three day holidays...   the schedule seems to widen up a lot...

PP thoughts only, I ran into too many scheduling challenges early on... minimum hours were applied whether we used them or not...

Best regards,

-a-

[Matt Ward]

In my opinion, you buy a plane because you want to fly it when and how you want to fly it. I don’t mean for that to sound condescending, but it’s my reason for owning. I’ve been in clubs and part of rental fleets. There is probably not a ton of financial difference for me in renting vs buying. And in fact after buying, I haven’t thought about that calculus once. Except of course that all the maintenance is on me which has a pretty meaningful amount of downside risk. I suppose the incremental is lower because I don’t reserve anything - I just pay as I go. But it’s my plane and I can do whatever I want with it, which is the point of why I did it! 
Further, there really is very little to prepare you for actually owning one. I did plenty of spreadsheeting, read the Mike Busch stuff, followed the type clubs, etc., but it was only a very small percentage of what I now know since I bought my plane. But I wouldn’t trade it! You have to find that Single Most Important Reason for why you want to own because you’re going to be leaning into it a lot. 

[MikeOH]

I rented for decades before owning.  Never tried the club route.  Here's why: I just didn't see the big advantage...maybe a bit cheaper, but all the same scheduling problems that renting has.  Still going to have to wonder what the last guy that flew it did, things are NOT the way you left them, etc.

IMHO, if you are worried about the cost difference, you really can't afford to own.  That's the one advantage of a club: the downside risks are mitigated by spreading out the unexpected expense.

Bottom line: If you can afford $15K to $20K per year (forget the number of hours flown) then it's totally worth it to own.  Just remember, it's oxymoronic to justify the cost under any circumstance  So, don't even try.

Edited June 7, 2020 by MikeOH

[Ragsf15e]

2 hours ago, MikeOH said:

I rented for decades before owning.  Never tried the club route.  Here's why: I just didn't see the big advantage...maybe a bit cheaper, but all the same scheduling problems that renting has.  Still going to have to wonder what the last guy that flew it did, things are NOT the way you left them, etc.

IMHO, if you are worried about the cost difference, you really can't afford to own.  That's the one advantage of a club: the downside risks are mitigated by spreading out the unexpected expense.

Bottom line: If you can afford $15K to $20K per year (forget the number of hours flown) then it's totally worth it to own.  Just remember, it's oxymoronic to justify the cost under any circumstance  So, don't even try.

Same way I view it, $15-$20k per year, done.  Just write that off.  If you can do that pretty well, buying is definitely the way to go.

[M20F-1968]

My plane is my first and likely forever plane.  I bought it as a project airplane.  It is now one of a kind, represents what a vintage Mooney is and what a Vintage Mooney could have been if they kept making them.  After dealing with some dishonest mechanics, I found good people and I made a conscious decision to finish with a nice airplane, which is why it ended up a Lindy winner last summer.  The project part had a learning curve, it was difficult but rewarding in its own way.  I mention the learning curve as there certainly was an aspect of education, and that is really the reason I bought instead of continuing as a club member.  I wanted to know the airplane I fly, have something that was more capable than the Archer the club had, know how it was maintained rather than fly an unknown entity, know its systems and equipment, know how the plane responds and how I respond to it.  My Mooney has taught me to fly in a way I would not have achieved had I continued to be a club member.  It was an education in aviation and and an education in other ways as well.

John Breda

[gacoon]

No debate, answer the question:  can you take the plane whenever you want for as long as you want?  If that is a requirement a shared plane is probably the wrong alternative.  Otherwise, cost wise very difficult to beat cost sharing if expense is important.

Edited June 7, 2020 by gacoon

[amillet]

7 hours ago, paulsalem said:

I’m doing the buy vs club debate. I’m looking for an IFR capable 4 seat go somewhere airplane. My local club has 2 SR20s which other than FIKI is perfect for me. But if it likely makes sense financially I’d rather buy a plane (or get into 1/2 or 1/3 partnership).

Estimate of 75-100 hours / year.

Mission: 350nm with 400lbs payload (3 pax  + bags including growing 4 year old). This would be my first airplane purchase so I’m sure there is a lot I don’t know, hence the post here.

Below is what the local club would charge me based upon 50/75/100 hours per year. This includes the monthly dues but not the $4,500 buy in ($2,500 refundable upon exit).

Times are Hobbs wet

• 50hrs - $8,480 | $170 / hr
• 75hrs - $11,730 | $156 / hr
• 100hrs $14,980 | $150 / hr

Any advice would be appreciated. Thanks!

Those prices are probably half of sole ownership 

[Niko182]

When you own a plane you're motivated to go places. in the end, it doesn't matter if the plane is sitting, or it's being flown. You're paying the price regardless. So that at least motivates me to fly. also the plane is left in the same condition every time.

[skydvrboy]

Must be nice to have a choice!  There is only one flying club within 80 miles of me and they fly a ‘69 172.  Eh, no thanks.

Maybe I am alone here, but owning changed my whole financial perspective of flying.  You see, I have the means but I am frugal.  So when renting, I always looked at the cost and decided if that flight was worth it.  Now that I own, I don’t even think about the cost of a given flight, I just do it.  After paying all the fixed expenses, it only makes sense to pay that tiny little extra to take a given flight.  That bodes well for currency and proficiency. 

Edited June 7, 2020 by skydvrboy

[MikeOH]

To further skydvrboy's comment...I used to think about how much I was spending when renting.  Now that I own, I honestly never give it a thought.  Get off work, nice day, time for a quick flight.  Fly to Paso Robles for the weekend, climb in the plane with no more thought than a drive to the grocery store!  Most of the money is really fixed costs, the variable cost of a give flight is lost in the rounding.  I don't even worry too much about gas prices if I'm on a long trip; a buck more a gallon is only an additional $40 or $50 and is an insignificant annual adder; I'm more interested in keeping my wife happy at a gold plated FBO with "free" cookies  Believe me, we spend way more on a nice dinner in Paso...

[kortopates]

There is no way you can justify buying an aircraft to save money on rental costs. We buy a plane, and pay much more per hour than rental cost, for sole exclusive 24x7 access to use whenever and where ever. I never thought the “mission requirements” for matching your mission to your plane ever made sense. It makes far more sense to me as to how much you really love aviation and how much of your recreational $’s are you willing to devote to aviation. After all, I am pretty certain that if I had unlimited funds I’d have no problem finding great destinations beyond my range in a TBM or Eclipse.

 

Like most, I poured over spread sheets before I bought my first plane. It was largely a waste of time because I really wasn’t focusing on the big picture - which was simply how much money I was willing to devote to my annual aviation budget. I belong to the country’s largest club. Rental prices are extremely competitive with planes ranging from C-150 to A36 and SR22’s etc. But renters have to book weekend dates well in advance and can’t take them anywhere. But if reducing cost where a priority I’d still be renting. I can’t really tell you the minimum annual budget you’d need to own your own plane because everyone maintains and operates them differently. But I’d think few can do it for under $20k year repeatedly and I budget twice that. Plane ownership is not inexpensive, buts it’s a bargain for the satisfaction and enjoyment it provides both myself and my pilot wife.

 

 

Sent from my iPhone using Tapatalk

[David Lloyd]

I bought an airplane before getting a private license as I would not have been able to do a short overnight business trip without the minimum per day charges.  My plane was ready to go any day needed except when down for maintenance, an that was planned around in advance.  Early into 40 years of ownership I found a huge benefit to me was knowing who flew my airplane last and if anything was not working as it should.  Every now and then, a surprise would happen on startup: a vacuum pump would fail, or an alternator, once a door handle SB bulletin was complied and had me locked in the plane at 5:30 in the morning.  Those things would stop the flight of a club airplane also.  

[quik flite]

If you own the plane approximately 1000-1500 per month , if everything goes ok. Not counting upgrades   Pretty reliable average. In my location 

[Bob - S50]

You may all like owning the plane by yourself.  I may be lucky, but having 3 partners has worked great for me for a couple reasons.

Obviously, it has cut my cost of ownership.  As I showed above, even with monthly dues, flying my Mooney is cheaper than renting a 172 (I fly about 70 or 80 hours/year).

It makes it easier to keep the plane exercised instead of corroding in the hangar.  With 4 of us flying we put about 150 to 200 hours/year on the plane and it never sits more than 2 weeks without flying.

I may be lucky, but in the 7 years we've had the plane, we've had a total of 6 different people in the group (as partners sold their share) and have never had a time when there was a scheduling conflict.  While we each operate the plane just a bit differently, we've agreed to standards that cover most things.  When I get in the plane, there is rarely something I need to change.  About as bad as it gets is possibly needing to change the scale on the GPS.

Having partners of like mind is a great way to cut the cost of flying.

[kortopates]

Bob, IMO you're a lucky guy. But honestly, I tend to suspect your partners are probably the luckier ones. You go out of your way to help you're fellow pilots here on Mooneyspace as well as frequent BT, so I can only imagine you're a very understanding and helpful guy to your Mooney partnership. I know several pilots in partnerships, they all seem to be in them for different reasons. You have the pilots, that I suspect are more like myself and yourself that are very serious about the their aviation hobby and are in it to get a lot of use out of their shared Mooney and then you have pilots that share aviation among many interest and are more in it for casual use of the aircraft and aren't really flying that much for various reasons. I see the more serious pilots have to work hard to sell the need for upgrades and spend more than the minimum to keep the plane flying. I've assumed that makes sense for many since it was the lower cost that attracted many to the partnership to begin with. But that's another freedom I really enjoy. You've spoken about many upgrades to your plane despite that antique KNS80 you're still find of (forgive my weak attempt at humor!) so I do get the impression your group probably is more positive about upgrades than many. Bottom line though, your partnership sounds a lot better with a happier bunch or like minded partners than what I typically hear about locally. But you have to be a big part of the success behind your partnership.

[larryb]

It depends on the type of flying you want to do. Long trips and stay somewhere for a week or three? Taking the plane away from home base for a long period of time is more difficult in a shared situation. For me personally owning is the only way to have access to an airplane for the type of usage I want.

[Bob - S50]

59 minutes ago, larryb said:

It depends on the type of flying you want to do. Long trips and stay somewhere for a week or three? Taking the plane away from home base for a long period of time is more difficult in a shared situation. For me personally owning is the only way to have access to an airplane for the type of usage I want.

That's part of our agreement.  Taking the plane for up to a week is automatically approved unless someone objects within 7 days of making the reservation.  Taking it for more than 7 days requires specific approval of the group.

[Bob - S50]

1 hour ago, kortopates said:

Bob, IMO you're a lucky guy. But honestly, I tend to suspect your partners are probably the luckier ones. You go out of your way to help you're fellow pilots here on Mooneyspace as well as frequent BT, so I can only imagine you're a very understanding and helpful guy to your Mooney partnership. I know several pilots in partnerships, they all seem to be in them for different reasons. You have the pilots, that I suspect are more like myself and yourself that are very serious about the their aviation hobby and are in it to get a lot of use out of their shared Mooney and then you have pilots that share aviation among many interest and are more in it for casual use of the aircraft and aren't really flying that much for various reasons. I see the more serious pilots have to work hard to sell the need for upgrades and spend more than the minimum to keep the plane flying. I've assumed that makes sense for many since it was the lower cost that attracted many to the partnership to begin with. But that's another freedom I really enjoy. You've spoken about many upgrades to your plane despite that antique KNS80 you're still find of (forgive my weak attempt at humor!) so I do get the impression your group probably is more positive about upgrades than many. Bottom line though, your partnership sounds a lot better with a happier bunch or like minded partners than what I typically hear about locally. But you have to be a big part of the success behind your partnership.

Thanks for the kind words.  Yes I'm lucky.  I'm partnered with 3 other guys that want to fix things when they break.  However, part of our luck concerning upgrades is because of how our group is structured.  I really wanted to replace our inop KFC200 with the GFC500.  I was willing to spend money to do that.  The others were also willing, but less willing.  Our arrangement allowed me to foot the majority of the cost in exchange for a larger share of the LLC that owns the plane.  We all get to enjoy the benefits of the GFC.  When we finally decide to sell the plane, I'll get most if not all of my money back because I'll get a larger share of the sale plus a larger share of the reserve fund.

[shawnd]

On 6/6/2020 at 3:09 PM, Matt Ward said:

In my opinion, you buy a plane because you want to fly it when and how you want to fly it. I don’t mean for that to sound condescending, but it’s my reason for owning. I’ve been in clubs and part of rental fleets. There is probably not a ton of financial difference for me in renting vs buying. And in fact after buying, I haven’t thought about that calculus once. Except of course that all the maintenance is on me which has a pretty meaningful amount of downside risk. I suppose the incremental is lower because I don’t reserve anything - I just pay as I go. But it’s my plane and I can do whatever I want with it, which is the point of why I did it! 
Further, there really is very little to prepare you for actually owning one. I did plenty of spreadsheeting, read the Mike Busch stuff, followed the type clubs, etc., but it was only a very small percentage of what I now know since I bought my plane. But I wouldn’t trade it! You have to find that Single Most Important Reason for why you want to own because you’re going to be leaning into it a lot. 

As a recent purchaser, I went through the same debate. Partnership? Own? Keep renting the M20J? At the end of the day, it probably makes sense to go with a partnership to reduce costs, but at the same time now you have to worry about personalities, what happens if they want to leave, politics, etc., and needless to say: every decision has to be vetted with the group. You can't for example, decide to go with GI 275 b/c maybe the other partners want Garmin G5 instead.

With your own plane, yes the financial risks if something goes terribly wrong certainly exists. But, you can mitigate it by careful planning and saving up. You can take your family for a vacation and choose to extend by a week if you want to - without paying minimum charges per day nor having to coordinate. You want to upgrade to a longer body Mooney- completely your call. You know what the state of the aircraft is every time you get in it. Things stay the way you left it. You can plan ahead for fuel if you expect gross weight t/o the next day. And finally. it's YOUR OWN PLANE!