State of single engine prices - Thoughts?

[Danb]

Airplane, boat, golf membership, tennis, hunting fishing, gotta do something for enjoyment or entertainment. It all costs something. 

[aviatoreb]

1 hour ago, EricJ said:

Get a race car and you'll have the trifecta of motor vehicle financial inefficiency.

Hah! Gotcha! But my 27 boat isn’t a motor vehicle.  It’s a carbon fiber rowing scull… it’s 11” wide 27’4” long and weights 31lbs.

but a race car sounds fab!

actuslly this evening I got on a kick of wondering if I could get blimp flying lessons in 2023.  I haven’t found a way yet…

[gmonnig]

6 hours ago, DXB said:

18k is way too low. 30% is not at all crazy territory. It is probably spot on for me and many other folks who actually use their short body Mooney a reasonable amount. Consider my yearly costs in my heavily updated M20C: Hangar $5,400, insurance $1,800, annual $4,500, [120 hrs flying x 10 gal/hr x $6.50] $7,800.

So we're already at $19,500 without even considering other scheduled + unscheduled maintenance or engine/prop overhaul reserves.  I suspect all together I blow around 25k per year, and my insured hull value is 75k - so greater than 30%.

 

I agree. $400month hangar, $1800 insurance, $3500 annual (always do at least one upgrade a year), $850 Garmin/ForeFlight subscriptions, 100hrs flight time at $5gal $5000. So yeah I’m at $16k a year easy. I’ve spent an additional $25k in avionics/interior this year, on top of that. I really want an award at OSH in 23’ but I still need $15k plus to add a gfc500. It’s a never ending money train….but I love it.

[larryb]

Yes, expensive. But no more than daycare for a couple kids, private school for 1 or 2, and less than a year of college pretty much anywhere these days. I’m pretty sure that if anybody calculated their actual yearly cost for their Ford F250 they would be horrified.

[Pinecone]

11 hours ago, A64Pilot said:

My costs are Hangar 0 as I own, or more accurately rent from the bank, fuel 8 GPH and I’ll guess $5 a gl for 100 hours so $4,000 fuel, insurance $2,000 because I’m based on grass, I’m an IA so except for parts Annuals etc are free, but I’d guess $1,000 a yr on parts at least.

But don’t forget engine and accy amortization, on average an engine is 50K? so 2,000 hours is $25 an hour, guess $10 an hour for prop, mags, pumps etc, so add $3,500 to that 7K for $10,500 a yr.

So $10,500 a yr and I doubt it can be done any cheaper than that, and I may be underestimating parts because I don’t keep track.

This is why aircraft can’t be considered an appreciating investment, pay $100K on an airplane, keep it ten years pay another $100K, sell after 10 years for what you paid for it and even not counting inflation, your 100K in the hole. You would have to more than double your money to break even, and that’s if you did zero improvements.

Not saying don’t own an airplane, just don’t kid yourself that it’s a good investment, but then a lot of the things worth doing aren’t.

I would not count operating costs against the resale.

You don't count the electricity, water, sewage, gas/oil etc on a home.  Heck, you don't count taxes and insurance either.

You don't count gas, maintenance, tires, oil, insurance on a car either.

[Pinecone]

4 hours ago, larryb said:

Yes, expensive. But no more than daycare for a couple kids, private school for 1 or 2, and less than a year of college pretty much anywhere these days. I’m pretty sure that if anybody calculated their actual yearly cost for their Ford F250 they would be horrified.

Yeap.

GSO rate for reimbursement of driving your own car is currently 62.5 cents per mile.  So at the current rate of 14,263 per year, that is $8900 per year.  And that is based on a car, so a truck (lower mileage and higher price for diesel) will be higher.

And I am not sure that includes insurance, registration.  I think it only includes costs for actually driving (gas, tires, oil, maintenance).

BTW, the reimbursement rate for private aircraft is $1.74 per statute mile.

[A64Pilot]

12 hours ago, Hank said:

So you lump operating expenses into the value of the plane? Do you add up you power, water, sewer, gas, phone, internet, lawn service, etc., into the value of your home?

So back out fuel then it’s still not a viable investment.
So do you only consider what you paid for the airplane as cost of ownership?

But I’m talking about how cost affects value. But using your house example I don’t lump those expenses into value, that’s exactly the point, but I lump them into cost. For example many, almost all actually look at the house payment and tell themselves that they could afford the bigger house, but taxes are higher and more power required to heat and cool it, maintenance costs are higher, insurance is more so in fact the bigger house actually costs much more to own than just the payment, just as airplanes cost much more to own than just the purchase price.

But yes I do consider cost of ownership in deciding if something is a decent investment or not, or more accurately what the true cost of ownership is.

When you consider how much increase in equity you have in a house, to be accurate you should back out the years worth of taxes and insurance, upkeep, the interest you have paid over the years, and the lost income you would have received if that money had been invested in other mechanisms. If people actually ran those numbers they would find that they haven’t made as much money on the house as they supposed, especially when they back out fees associated with buying and selling

Very few things are actual appreciating investments when you factor all things in, for instance the post that was made showing how well the market has done historically over the years, didn’t include inflation. Example right now the market has to be gaining on average 8% just to break even due to inflation.

Average house cost $12,000 the year I was born, if it was sold today at twice what was paid for it, you didn’t make any money on it, because due to inflation things cost more than twice as much today, but most smile thinking they doubled their money.

So an airplane you bought 10 yrs ago even if you sell it for 25% more than you paid and you ignore the costs of ownership still isn’t a good investment, unless inflation ran very low for those 10 yrs. But the cost of ownership of an airplane is on average particularly high, higher than most things and unless really unusual conditions the cost of ownership simply wipes out any real though of one being a good investment.

So don’t kid yourself that an airplane is an investment, it’s not. But buy one anyway if you can afford it and enjoy it.

If I had to pay $1,000 a month hangar and $4,500 a yr for an Annual etc I couldn’t afford an airplane.

But for those looking to buy that come on here seeking what it costs to own, it appears that from looking at what others post that if you fly 100 hours a year that it costs about $200 an hour IF nothing happens like losing a cam or a bad cylinder or prop governor etc., etc. If you fly less than 100 hours that the cost per hour goes up. Years ago I sort of figured that the 100 hours a year was the break even point, less than that and you ought to rent, and that was with me being an A&P at the time.

I had one real bad experience with renting, and one that I didn’t like so in truth I never did much renting, but concede that from a logical $$$ point of view it often makes the most sense, especially if you include that every one of us carries significant risk of a possible real bad outcome from losing a cam or discovering corrosion or whatever.

I think it sort of our duty to new guys like the one that’s looking to buy that started this post to point out the dark side of aircraft ownership, not just the happy side. To be the buzz kill if you will. 

Too many just don’t think about actual costs, they assume it’s like a car, that costs are primarily fuel and tires.

When was the last time you had to replace a motor in a car? 

[A64Pilot]

2 hours ago, Pinecone said:

I would not count operating costs against the resale.

You don't count the electricity, water, sewage, gas/oil etc on a home.  Heck, you don't count taxes and insurance either.

You don't count gas, maintenance, tires, oil, insurance on a car either.

IF your looking at how those things perform as an investment you should, but I don’t think my airplanes or my cars as investments, they are depreciating assets, but I enjoy them so I consider the money well spent

But yes I DO count fuel, tires, oil AND maintenance on a car, big reason I bought electric as opposed to ICE, because of lower operating expense, the electric car cost me $1 a day in fuel to drive over 14,000 miles a year. Just looked at the year tab, actual per month due to trips and Supercharging is $58 a month.

 

[aviatoreb]

All this said - I did not buy my airplane thinking it was an investment, but because I wanted an airplane.  I bought it almost 13 years ago at the height of that 2007 financial crisis when airplane prices were fantastic.  But more important, the school I had been renting from at my home rural field had gone bankrupt so it was either buy my own or quite flying.

That said, looking at airplane prices today, I would likely at least double the purchase price I bought for.  That doesn't mean I made a profit since, because I wanted to own a nice plane and I've enjoyed doing so, I have improved my plane almost every year and in so doing, spent a heck of a lot of money on all sorts of things, paint, interior, avionics, and so on and so on, besides general maintenance.

Still this ownership is quite different from a car because my car looses a big chunk of value as soon as I drive it off the lot new, and then it looses value every year until I sell at about 10 years.  Whereas my airplane has gained a significant amount of value.

So I would say I lost less owning an airplane than I would have by buying a series of cars every two years like most of my friends.  Not counting fuel.  Not counting hangar (no own counts renting their parking place for their car).

So its different from owning a car.   And also in many ways it is different from owning real estate. 

[toto]

28 minutes ago, A64Pilot said:

Average house cost $12,000 the year I was born, if it was sold today at twice what was paid for it, you didn’t make any money on it, because due to inflation things cost more than twice as much today, but most smile thinking they doubled their money.

I'm mostly just eating popcorn here, but I'll point out that a house is an "investment" in the US primarily because Americans are terrible at saving money, and a 30-year mortgage is basically just a big savings account that pays negative interest (but will give you a nest egg at the end that can pay for stuff).

[jlunseth]

All I know is supply is way down, even with the economy in worse shape than it was a few years ago. If you go back just five years, a look at controller would have disclosed around 15 or more 231’s for sale and if you watched long enough, they weren’t moving and prices needed to be dropped by the seller before they would move. Now there are typically just a handful available, and at least part of the handful are projects - either runouts or planes with old electronics or both. Which says good things for the fleet actually because people are buying those and returning them to serviceable condition. After 2008 there were acres of hangars with for sale signs, now it is hard to find an inexpensive place to keep a plane. Somewhere along the way demand rose sharply and all the inventory began to sell out. Economy? COVID and the airline issues? Not wanting to have to wear a mask everywhere you went? Electronics making GA safer? Maybe even the trend towards more women taking lessons and not fewer men, which keeps the pilot pool at least stable. Getting control of fuel and hangar prices are the two weak spots. Probably all have played a role. It’s a nice place to be in if you are an owner already.

[Echo]

1 hour ago, A64Pilot said:

So back out fuel then it’s still not a viable investment.
So do you only consider what you paid for the airplane as cost of ownership?

But I’m talking about how cost affects value. But using your house example I don’t lump those expenses into value, that’s exactly the point, but I lump them into cost. For example many, almost all actually look at the house payment and tell themselves that they could afford the bigger house, but taxes are higher and more power required to heat and cool it, maintenance costs are higher, insurance is more so in fact the bigger house actually costs much more to own than just the payment, just as airplanes cost much more to own than just the purchase price.

But yes I do consider cost of ownership in deciding if something is a decent investment or not, or more accurately what the true cost of ownership is.

When you consider how much increase in equity you have in a house, to be accurate you should back out the years worth of taxes and insurance, upkeep, the interest you have paid over the years, and the lost income you would have received if that money had been invested in other mechanisms. If people actually ran those numbers they would find that they haven’t made as much money on the house as they supposed, especially when they back out fees associated with buying and selling

Very few things are actual appreciating investments when you factor all things in, for instance the post that was made showing how well the market has done historically over the years, didn’t include inflation. Example right now the market has to be gaining on average 8% just to break even due to inflation.

Average house cost $12,000 the year I was born, if it was sold today at twice what was paid for it, you didn’t make any money on it, because due to inflation things cost more than twice as much today, but most smile thinking they doubled their money.

So an airplane you bought 10 yrs ago even if you sell it for 25% more than you paid and you ignore the costs of ownership still isn’t a good investment, unless inflation ran very low for those 10 yrs. But the cost of ownership of an airplane is on average particularly high, higher than most things and unless really unusual conditions the cost of ownership simply wipes out any real though of one being a good investment.

So don’t kid yourself that an airplane is an investment, it’s not. But buy one anyway if you can afford it and enjoy it.

If I had to pay $1,000 a month hangar and $4,500 a yr for an Annual etc I couldn’t afford an airplane.

But for those looking to buy that come on here seeking what it costs to own, it appears that from looking at what others post that if you fly 100 hours a year that it costs about $200 an hour IF nothing happens like losing a cam or a bad cylinder or prop governor etc., etc. If you fly less than 100 hours that the cost per hour goes up. Years ago I sort of figured that the 100 hours a year was the break even point, less than that and you ought to rent, and that was with me being an A&P at the time.

I had one real bad experience with renting, and one that I didn’t like so in truth I never did much renting, but concede that from a logical $$$ point of view it often makes the most sense, especially if you include that every one of us carries significant risk of a possible real bad outcome from losing a cam or discovering corrosion or whatever.

I think it sort of our duty to new guys like the one that’s looking to buy that started this post to point out the dark side of aircraft ownership, not just the happy side. To be the buzz kill if you will. 

Too many just don’t think about actual costs, they assume it’s like a car, that costs are primarily fuel and tires.

When was the last time you had to replace a motor in a car? 

You nailed it on the buzzkill.  Lol.  Mission accomplished.  I am going to state that in my experience in Mooney ownership over 20 years 20-30% of plane cost every year includes a LOT of upgrading and making the plane win a prize pretty vs. a time machine for getting to places that big tin does not go.

[Pinecone]

Except for those costs of operation give you the operation of the aircraft (or car or living in the house).

Yes, they are part of the total cost of ownership, but, IMO, not a part of the value versus purchase price.

[A64Pilot]

30 minutes ago, Echo said:

You nailed it on the buzzkill.  Lol.  Mission accomplished.  I am going to state that in my experience in Mooney ownership over 20 years 20-30% of plane cost every year includes a LOT of upgrading and making the plane win a prize pretty vs. a time machine for getting to places that big tin does not go.

I’ve just seen and heard on here too many actually very sad stories.

People buy an airplane and a year later still haven’t flown it from all the problems found in the first annual sometimes, of course there are happy stories, you just hear about the nightmares though, happy stories don’t often make the news.

Some figure they can afford an inexpensive complex airplane, then unfortunately find out it’s not inexpensive and I’ve seen it wreck marriages, because of what’s called the sunk cost fallacy.

My advice is if you really want an airplane, even a Mooney buy it, but understand what your getting into, and be sure to be there for the pre-buy, I mean physically look at everything, if the mechanic won’t let you, find another. iF said pre-buy after the first day looks good, turn it into an Annual. That should prevent the very ugly discoveries so many have had at the first Annual. Much better to be out the cost of half an Annual than to be looking at an excessively corroded main spar after she’s yours.

But forget about ANY upgrades for at least the first year, because you may need that money to start with and secondly you may discover that must have thing is nice certainly, but it’s not really a must have, the thing about ANY user forum is it has a tendency to get people believing there are so many things they must have, whatever the latest greatest thing is.

If it’s 50 years old, then it’s flown safely for 50 years without that must have thing, it probably can for one more year.

Then after the first year and after your second Annual when you can feel pretty sure you have found and worked through most of the difficulties, and after you have a better idea of what you really need, then pop for whatever it is, but understand it’s probably going to cost quite a bit more than you thought and your doing without your airplane for probably longer and sometimes it has bugs that will need working out.

Aviation is an expensive Mistress, but many find it’s worth it, just don’t go in thinking your going to save money or that it’s a good investment and you won’t be disappointed. 

[A64Pilot]

22 minutes ago, Pinecone said:

Except for those costs of operation give you the operation of the aircraft (or car or living in the house).

Yes, they are part of the total cost of ownership, but, IMO, not a part of the value versus purchase price.

What are you calling value?

I think that’s what our difference is, you determine how good an investment is when you compare total cost to expected sales in the future, if total costs exceed expected sales price then it gives a negative return and that’s not considered a good investment.

You buy a beach house for an investment as an example, but because it’s on the beach insurance is very high. You sell it ten years later for %50 more than you paid for it, you made good money right?

Maybe not when you add in insurance, maintenance and taxes to say nothing of sales commissions and the lost income from if you had invested the money in something else.

So if you bought it as an investment, you failed.

But if you bought it for having a place on the beach to spend weekends, then you succeeded. But it may be that if you didn’t use it every weekend, then it may have been less expensive to rent.

I’ve never been a renter, heck never leased a car, but concede that it often is more logical money wise. 

Nothing wrong with spending money on something you enjoy. Just don’t fall into the salesman trap of it being an investment.

[Fly Boomer]

8 hours ago, larryb said:

Yes, expensive. But no more than daycare for a couple kids, private school for 1 or 2, and less than a year of coverage pretty much anywhere these days. I’m pretty sure that if anybody calculated their actual yearly cost for their Ford F250 they would be horrified.

I just heard that it costs, on average, north of $300,000 to raise one child through age 17.  Obviously, college can really blow that number up.

[Marauder]

I just heard that it costs, on average, north of $300,000 to raise one child through age 17.  Obviously, college can really blow that number up.

Wait until you see the numbers for a person who spends 5 years in a nursing home.

As a 32 year owner of the same plane, I can tell you to the penny what I spent on OpEx. Enough to buy a couple of Pocono Mountain cabins or a really nice beach house or my 5 years in a nursing home.

I had an old timer plane owner educate me about flying. He said it would be cheaper for me to stand at the end of the runway throwing $20 bills in the air watching planes fly rather than owning one. I think he was right.

I always find it amusing reading these threads. For only a few, plane ownership is a necessity. For the rest, it is a hobby, something we enjoy that few others can do. The more we can incorporate it into our lifestyle, the easier it is to say we got our money’s worth.

People tend to justify these expenses in a bunch of ways. Everything from ignoring expenses, not really tracking them or rationalizing them (I won’t keep the plane long enough to worry about an engine overhaul). The bottom line is that if you didn’t have an airplane, you wouldn’t have any of these expenses.

It’s like anything in life, if you enjoy it and can afford it, do it. You’re on this ride we call life only once.

As for the car expense side thread. My grandmother stated it nicely. “If you want to get back at your worst enemy, buy them a used car”.


Sent from my iPhone using Tapatalk Pro

[PT20J]

Three ways to look at it:

1) An older and wiser long-time airplane owner advised me when I was considering purchasing my first airplane that, "The best part of owning is that the flying is free. If you consider the cost of hangar, insurance, maintenance, reserves, etc., then the out of pocket expense (gas and oil) to fly for an hour is nothing."

2) Richard Bach wrote an article years ago in which he wrote that he was trying to figure out how to afford a particular airplane that had caught his eye when he realized that he really wanted a twin which burned lot more gas, and by not buying the twin, the money he saved on fuel would pay for the airplane he was considering. And, he wrote, if he ever ran out of that money, he would not buy a Learjet and he'd save so much on fuel he'd never run out of money.

3) Richard Collins repeatedly pointed out that the cost of ownership of any airplane is more related to the purchase price of a new airplane than a used airplane.

Skip

[DCarlton]

7 minutes ago, PT20J said:

"The best part of owning is that the flying is free. If you consider the cost of hangar, insurance, maintenance, reserves, etc., then the out of pocket expense (gas and oil) to fly for an hour is nothing."

 

I'm going with the first one; it makes complete sense.  Additionally, I do know that once the training is over, renting is not much fun; being on someone else schedule is not much fun; but owning and flying for "free" is fun.  

[EricJ]

17 minutes ago, PT20J said:

2) Richard Bach wrote an article years ago in which he wrote that he was trying to figure out how to afford a particular airplane that had caught his eye when he realized that he really wanted a twin which burned lot more gas, and by not buying the twin, the money he saved on fuel would pay for the airplane he was considering. And, he wrote, if he ever ran out of that money, he would not buy a Learjet and he'd save so much on fuel he'd never run out of money.

This is why I quit work, and now I live on the money I save on income taxes.   

[hammdo]

1 hour ago, DCarlton said:

renting is not much fun; being on someone else schedule is not much fun; but owning and flying for "free" is fun.  

Not to mention the layover costs associated with renting when flying for ‘fun’ and the plane sits for a while…

Renting last year - with layovers - would have cost me ~$33,500 (148 hrs * $200 + $3600 for layover days). Not to mention having to deal with the plane not being available.

So the money I ‘saved’ by owning is now going into fuel flow, upgraded LHS, SWTA replacement windshield, tanks patched, and subscriptions, etc ;o)

-Don

[DCarlton]

1 hour ago, hammdo said:

Not to mention the layover costs associated with renting when flying for ‘fun’ and the plane sits for a while…

Renting last year - with layovers - would have cost me ~$33,500 (148 hrs * $200 + $3600 for layover days). Not to mention having to deal with the plane not being available.

So the money I ‘saved’ by owning is now going into fuel flow, upgraded LHS, SWTA replacement windshield, tanks patched, and subscriptions, etc ;o)

-Don

I think I have the SWTA windshield.  Not sure without checking but I do have their cowl mod.  Where you you find a replacement for the windshield?  Thanks.

[hammdo]

SWTA - they ordered it for me (GLAP I believe does it for them) - not the cheapest though. JD is also installing it for me when it comes in… Just give JD a call…

-Don

[DCarlton]

1 hour ago, hammdo said:

SWTA - they ordered it for me (GLAP I believe does it for them) - not the cheapest though. JD is also installing it for me when it comes in… Just give JD a call…

-Don

Although not necessary, I've thought about replacing mine.  It's got a few stop drilled cracks and it's getting old.  Would be interesting in knowing how many hours it takes and how well it goes.  Thanks.  

[hammdo]

That’s mine also - with crazing, thus why I’m doing it now before it gets harder to find.

-Don