If you have been following the aviation market, you know the prices for aircraft have skyrocketed over the last few years. It has changed my buying habits. I used to buy an aircraft, fly it for a few months, resell and make a few dollars above my costs. Investing in aircraft was always a great way to pay for my flying and make a few dollars at the same time.
In my seminars and articles, I always talk about using aircraft: the more you fly the cheaper it gets (per hour). But lately the costs associated with owning an aircraft (or anything for that matter) have continued to increase.
Storage and insurance are two of the biggest costs for an aircraft. Those items don’t change whether you fly or not. Since we usually calculate our costs by the hour, if you are not flying very many hours per year, the cost for each one of those hours will look crazy high. Plus, if you don’t fly much it is harder on the aircraft. The best thing for an aircraft, in my opinion, is to fly it.
Don’t worry, aircraft owners aren’t the only ones with this issue. Our local marina has raised their slip prices. The slip I used to rent is now $4,600 for six months. That’s more than a hangar in our area. At least an aircraft can fly year-round. A boat, not so much. I have talked to people that are not putting their boats in the water, because last year they only used it about five times. The “per use” cost has exponentially increased with the increase in slip fees.
The same thing happens to aircraft owners. What used to be acceptable has now become too expensive for some. I know I always say you should own an aircraft, but there are times when maybe you shouldn’t. That doesn’t mean giving up flying, but maybe it’s time to take in a partner, join a flying club, or rent from the local FBO. Which brings up a word that most pilots hate to think about… “sold!” There comes a time in almost every aircraft owner’s life when you need to sell your beloved bird.
Time to Let It Go?
Since most aircraft are like part of the family, we do not want to just give them away. We want to get the best price possible. If we do have to “part company,” we want to do it in the most painless way possible. In aviation, the pain of the sale can be offset by the amount of money we get for the aircraft. What is that old line “no pain if we gain?” The more money we get, the less pain we must endure. With today’s market prices of aircraft, it may be less painful than you think.
Another thought, with more money we can get a newer, better-equipped replacement aircraft, right? Wait a minute. That doesn’t fix the initial problem and might just make matters worse. Sometimes we just need to accept the fact that
there are other bills to be paid and the money from the sale of an aircraft we rarely use can help take the pressure off the situation. Whatever the reason, seller’s depression can usually be overcome with enough money.
Which brings up another question: How do we get the most value from our aircraft? Everyone has an opinion on the best way to get the most dollars from your plane. I have heard them all. There is basically only one way. Buy the aircraft at a low price and sell it at a higher price. Too simple? This concept has worked for years in any market: bear or bull. You can be dealing in cars, homes, or stocks and bonds. Buying low, selling high is the key. You will always make money if you follow that rule of investing.
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