On 18-Dec-2004, "Jay Honeck" wrote:

The old "100 hours per year break-even point" is about right -- until you
do a major interior upgrade, or replace a cylinder. Than *poof* --
renting
looks mighty fine. I'd bet the "real" break-even point (over time) is
closer to 150 hours per year.

But you're right -- owning is worth every penny.


My two co-owners and I recently tried to calculate the actual per-hour cost
to fly our Arrow IV. At our current annual usage of around 170 hours, this
number came to just under $100/hr (tach time), which is well below what an
Arrow would rent for in this area. We thought we were doing pretty well,
especially since we pay the extra cost to keep our plane hangared (which is
rare for rental planes around here).

However, our calculation did not include the cost of our investment. If we
sold the plane for fair market value and put the proceeds in a safe
investment paying 6% interest, the (lost) income would work out to about $28
per flight hour, which would put the total cost very much in line with
renting. On the other hand, the value of the plane is also appreciating, so
this is really not apples-to-apples.

Bottom line: the 150 hour break-even rule of thumb is probably about right.
If you (or a co-ownership group) have that much utilization or more, it
makes economic sense to own, particularly considering all of the other
benefits that come with ownership.
--
-Elliott Drucker