First Time Buyer. Help!

In other words, if I were to look at my airplane maintenance expenses for
a
given year they might differ by as much as a factor of 3, yet a running
5-year average would be fairly predictable.


Okay, I can see this, but it sounds like you are saying that years 1 and 2
are bound to be higher than 3, 4, and 5.

I can assure you that if I were to trade up ( which I may do), I would
still
be ahead due to tax savings.

What tax savings do you get by owning instead of renting? If you mean
depreciation, then you have to balance that against the cost of capital of
buying an airplane. Rental prices spread the cost of capital over many
users, so an accurate comparison of rental vs. owning usually favors
renting
from a purely economic perspective.


I could care less about the capital costs to others. Its the cost to me
that counts. So far, I have spent about what renting would have cost me.
Yes, I lose cost of money on the down payment, but given that all my
investments have been headed south except my home and plane...

What kills renting is fleet insurance at 8% of hull. Its not the capital
costs. The insurance company is making all the money on my plane. I am
just covering costs other than purchase (not counting depreciation write
offs).


My plane is on a leaseback, and its not really
costing much at all.

Well the only leaseback model I have seen that works well is where the
owner
is an A&P or otherwise can tightly control maintenance costs.


My experience has been fine. The plane has not had many problems that were
not covered under warranty, or that the factory did not pick up outside of
warranty. I did switch FBO's, but I didn't have any real gripes about the
cost of repairs at the old school. Perhaps your AP's are more aggressive in
your area. Down here, they are cheaper than car mechanics.

A new airplane has much lower maintenance costs, but the value of a new
airplane depreciates and thus creates a high risk of a loss.


I would only sell my plane in a trade. The free loan from Uncle Sam that
comes in the form of depreciation and expense write off is much greater than
the actual depreciation so I would be ahead so long as I can aviod recapture
which is pretty easy to do.


So a 60k plane, put 200 hours on it in 2 years, what is the worst you
will
lose
out? Maybe it will end up costing you an extra $4,000 or $5,000, IF you
really did buy the wrong plane. In the meantime, you had a lot of value
you

You could lose much more than that. A new engine could cost twice your
estimated maximum loss. New exhaust, corrosion repair, new prop are
others
which could cause very significant blips in maintenance costs.

You are assuming the most incredible losses. Also, if you put a new engine
in the plane you can get back much of that because it increases the value,
so your only loss is the hours short of TBO. Corrosion repair should not
occur within a few years of an adequate prebuy. If someone is going to buy
badly, it won't matter what kind of pilot they are. A fool will still be a
fool after he has his ATP.

every plane flying by, and wishing I were able to fly. Are you full
time
in
the aviation business? You seem to have lost the passion, man!
Certainly,
without knowing the income of the person you are working with, its hard
to
tell what they consider a reasonable loss, but to anyone in the flying
hobby
an extra couple thousand a year can't be a huge mistake.

I haven't lost the passion at all; I am as addicted to airplanes as anyone
else. I have, however, been around enough to have a sense of the economic
reality of owning an airplane.

I only wish the risk of airplane maintenance were only an extra couple
thousand dollars per year. I have known any number of instances where
surprise maintenance cost a pilot 20% of the value of an airplane -- no
matter if the airplane is a Piper Cub or a Gulfstream, that is a lot of
money.

I am not sure that you are subtracting increases in the plane's value from
the costs. If you can recoup the repairs in the resale, you never really
lost the money. 20k can almost rebuild planes in the under 100k range
unless you have to replace a low time engine without any relief from the
manufacturer.



Aha! This could be a gem of info. I am completely inexperienced here.
Tell me more. What kind of bill are we looking at on a 50 to 100k basic
plane like 182, arrow, mooney etc. I know the common wisdom on avionics
is
that adding them to an old frame gets a poor return, but what about
other
repairs and fixes. Are there any rules of thumb like 20% or 50% or what
not?

A typical rule of thumb is to expect 5% to 10% of an airplane's cost in
"catch up" maintenance with a possible upper limits of 20% if you get
really
unlucky.


I would be interested to hear what others think of this rule of thumb,
anyone? What do you consider the odds of being really unlucky are 5%?



Perhaps I mistated. I think you may not know what you WANT. What you
NEED
will be much easier to identify though. Where you are going to travel

Most students do not have a good sense of what avionics they will need.
They also tend not to have enough perspective on weather patterns to make
judgments on items like weather avoidance equipment vs. a nice paint job,
turbocharger vs. extended fuel tanks, etc.


You are talking about planes that should be flown buy 300 plus hour pilots.
300 hours is a lot of rental, and a lot of time for someone who wants to own
rather than rent. Really, I would plan on having many more hours than that
before trying use a stormscope or strikefinder to avoid weather. I advise
using the phone to avoid the weather before you decide to fly to pilots that
green.



--
Richard Kaplan, CFII

www.flyimc.com