Share vs. Hire - Pros and Cons?

[Admin]

You have looked at OpEx (Operational Expenditure) you also now need to look at CapEx, Capital Expenditure...Finance Costs, Opportunity Costs (i.e. the return you could get using that same money for other opportunities like investment, etc)

 

 

[rdarby]

To me having more than one share would just increase your costs. You only have so much free time to fly, so why pay for the plane when it's just sitting there? More than one share defeats the purpose of a syndicate a bit. It could also lead to discussions on how much each person is entitled to fly, and that could be messy. Much better if your syndicate naturally flies an equal amount, owns an equal amount and works an equal amount.

 

 

[fly_tornado]

The beauty of being in a syndicate is if you want to change something, your syndicate can change it. The downside of a syndicate is if something breaks, you have to pay for it even if you didn't break it. I am surprised more planes aren't in syndicates, goes to show how fussy pilots are.

 

 

[metalman]

You have looked at OpEx (Operational Expenditure) you also now need to look at CapEx, Capital Expenditure...Finance Costs, Opportunity Costs (i.e. the return you could get using that same money for other opportunities like investment, etc)

Yeh I know that it's prudent to think along those lines , but I veiw my plane in the same way guys with boats, motor homes , racing cars do, the plane will never 'make' money and yeh if I sold it I could buy another property, but then I'd spend my weekends watching the other guys play around in their planes and get sh1tty, probably kick the dog, yell at the missus, and end up in divorce court, makes the plane a real bargain when I think of it;-)

 

 

[Admin]

It was in reference to the question of Share Vs Hire and:

 

$107 per hour( it does make the $150 per hour for our local Tecnam look pretty good)

If I've missed something in the figures ,do tell,

 

Cheers Met

so when you add the CapEx you may well be up at the same price as that Tecnam you referenced that you can hire

 

 

[dazza 38]

I guess later on when a person sells their aircraft and hang up their head set. They will recoup a little bit of their Cap Ex.

 

 

[Gentreau]

Metalman, isn't your engine fund figure on the high side ?

 

$24,000 seem a lot to pay for an engine overhaul, unless you intend to replce it with a new one.

 

.

 

 

[metalman]

Metalman, isn't your engine fund figure on the high side ?$24,000 seem a lot to pay for an engine overhaul, unless you intend to replce it with a new one.

.

Just erring on the high side, if ,at 100 hours a year, I still have it in 18years time I'd probably be paying around that for a rebuild, I've been told with the 912's that its nearly not worth rebuilding them , added to that its not uncommon for them to get into the 3-4000 hours on condition so IF it does well ,AND I still own it ,it'll be a pretty cheap little plane.

It also might be pretty cheap buying Rotax bits with the factory just up the road , over here just a crank can be about $5500 aud.

 

 

[cooperplace]

RyanYour syndicate is the best at the airfield and has been recognised by everyone as being so. Your are lucky to be in it and it was a good investment in my opinion. And you are right about the strong people involved in it they make it better for everyone else so make sure you always give them a hand as they do a lot of work. If I didnt own my own aircraft I would be in your syndicate in a shot

 

If all syndicates were like yours local aviation and clubs would be much better for it

what do you think are the features of this syndicate that make it so attractive?

 

 

[Zibi]

Couple things to think about:

 

- what sort of plane is it and how does it handle the rougher air during the day (for example I fly a trike, and you can pretty much only fly it in the first or last couple hours each day, as during the hotter parts of the day thermals make it hard work rather than fun to fly). That may limit your available time in the air and if all syndicate members are only weekend flyers, you may not be able to get a spot.

 

- how many planes for hire are there in your local area - again the availability angle

 

- how many people are there in the syndicate and how often do they fly - I know in some syndicates there are people that just want to have a plane and not actually fly it, but if you end up with a lot of people that want to fly each weekend

 

- can you fly during the week or only on weekends - you may get a much better deal out of the syndicate if you're the only one flying during the week.

 

- do you want to do any longer trips and if your syndicate or hire place would allow it.

 

I decided to buy my own, but at the end of the day it would most likely be cheaper to hire.

 

 

[chrisb]

Opex and capex, well then you might as well include what would i be doing instead of flying if i was investing my money instead... and so on. fact is you're going to spend money otherwise its worthless. Syndicate vs Own vs Hire, you'd have to do your own maths but it seems to be heavily based on how many hours you can afford and actually do fly.

 

 

[Guest Andys@coffs]

To me the decision came down to maintenance alone. As the owner I do my own maintenance and therefore the results of that I live or die by. I have an aircraft tech background and think I'm reasonably cautious in what I know and what I don't know and who I use for the "don't know areas"

 

As a renter and to a lesser extent as a syndicate member I have either no control or less control over that aspect. In a syndicate the determination might well be we always use X for maintenance, but I can never be sure that occurred, or that every niggle has been dealt with.

 

Its only one aspect...but worth considering.

 

Andy

 

 

[ruffasguts]

a pilot in America was taking his non flying mate for a flight , as they walked along the row of parked Cessna 172s the pilot said to his mate see that one 5 from the end that is different from the others.

 

his mate said but they all look the same ,the pilot replied yes but that one is MINE

 

Mick W

 

 

[facthunter]

Your own plane is very special. YOU have control over how everything is done. The next best move is to have your own hangar so the 'hangar rash" disease is removed.

 

Syndicates get the actual hours flown up. A plane needs to be used regularly If you don't you have to go to a fair bit of effort to store it properly and your fixed costs are higher per hour.

 

You can get rid of a lot of money, and you can't be absolutely sure of how much. If your local school has well maintained planes you know exactly how much you are going to pay. Also the longer you put off buying your own plane the more likely it will be a good choice when you do. Nev

 

 

[chrisb]

So buy your own plane eventually

 

What about buying your plane and leasing it out to a school for training or renting?

 

 

[facthunter]

And watch it become very second hand fast. There are not a lot of RAAus planes that are tough enough to do that with and not be concerned about it's condition, eventually. Nev

 

 

[chrisb]

What if I start off with a as you put it a "tough enough" but already second hand plane

 

 

[facthunter]

Fine , could work but often doesn't. You usually end up losing money. The money comes in but when something goes wrong it usually is not enough to cover the lot. You have to allow for all eventualities and long term costs. You end up with a high hours plane that few want. There's been a lot posted on this subject over the years. Nev.

 

 

[chrisb]

Im sure there has been. It's just speculation for me, once I get my licence, hopefully early next year and physically start to higher a plane settle in to some flying pattern. I'll do my own calculations based on my actual usage

 

 

[poteroo]

So buy your own plane eventuallyWhat about buying your plane and leasing it out to a school for training or renting?

This is a real can of worms. The only owners that I know who have done well out of this are instructors who are around the school all day and can keep an eye on how the aircraft is treated and who flys it. I have seen some truly disgraceful instances of (GA) schools neglect of cross-hired aircraft. You can have all the lease conditions that are legally possible - but the best way is to actually be there. And if you create an ownership group, and also cross-hire to a flying school....the potential for problems is increased out of sight!

 

happy days,

 

 

[Guest nunans]

As to the capital expendature/opportunity cost factor, we know that this is real and can add up to a lot. But the way I now look at it is that it could be applied to everthing I spend money on for example how much is this hamburger Really costing me considering I could skip lunch wnd pay an extra $6.50 off my home loan which would probably save me 50 over the term of the loan. It would be a fairly miserable outlook to have even if its reality

 

 

[chrisb]

And I guarantee if you dont spend $6.50 on lunch you'll most likely spend it on something else other then the home loan

 

 

[facthunter]

The home loan is the first thing to payoff, so they all say, as you don't claim the interest. Inflation helps you though. I don't know anyone who doesn't borrow to buy a house, but the interest sure adds up. (Imagine making the last payment) nev

 

 

[poteroo]

The home loan is the first thing to payoff, so they all say, as you don't claim the interest. Inflation helps you though. I don't know anyone who doesn't borrow to buy a house, but the interest sure adds up. (Imagine making the last payment) nev

I remember with great pleasure, being about to payoff the last thousand dollars of a $200k loan with a major bank in 1997. They said 'you owe us x thousand dollars as a penalty for paying this off early - it's in the fine print stupid! My better half paid it down to about 300 dollars or so, and we never made another payment for about 2 years. Eventually - bank is on the phone - would we like to pay off the loan? Ho hum - we're not in a hurry Mr Scrooge. Bank ran their numbers, and soon made us an offer to please close your account and we'll not only waive the penalty fee, but the $300+ owing as well. Banks don't like running accounts for small amounts. You can win - but it's rare. happy days,

 

 

[Guest Andys@coffs]

......and then the issue becomes what do you do with the title.......when you have mortgage I think the bank holds it.....when its discharged I think then they charge you for holding it........ might well be as good to pay it all but a few dollars down and let them have the cost of holding title...

 

I cant say as I know this from first hand experience unfortunately.....when ever we've got close, human nature being what it is we've usually rushed out to get back into debt for a bigger better faster flasher........more complex life!