Club Homepage Forums Classified Ads Buy & Sell - Everything But Airplanes Appreciative asset?

This question popped up over on the Yahoo forum, so I thought I would pose it here. How many here think that owning a 150 / 152 is an appreciating asset? In other words, if you bought a 150 / 152 today, do you think you could sell it for more money in the future? ( I initially used the word "profit" then recognized my error! )

If you buy it right to begin with it will appreciate in dollars unadjusted for inflation over a long period of time.

Of course, as we all know, after you figure in all of the ownership costs over that same long period of time you are so far upside down in it that....well let's just say most of us remain in denial over THAT figure.

You got this right Dan, I just handed over nearly $1700 for an annual (It did include new tires). And there I was thinking my help on the panels etc, would keep it cheap!

But as a friend of mine repeatedly tells me, "money is worth nothing 'till you spend it"

I think a well cared for 150/152 airframe should hold at least it's nominal value over the years. The one thing that seams to affect price most is engine time, A run out engine will drive a big hole in the sale price!

Whatever, it's worth it!

Joe 150F

I'd give that a conditional "Yes".

With proper maintenance the airplane should at least hold it's value. It's not like a new car that depreciates rapidly - the 150's and 152's are so old they've generally reached the bottom of that depreciation curve.

There's not likely to be any unusual AD's that ground the entire fleet (like the Beechcraft T-34's), and if the engine is not timed-out, then one should be able to sell it for about what they paid.

The only question mark I see is Light-Sport Aircraft. LSA's are perfectly designed to fulfill the 150/152's primary role as a personal putt-around vehicle. If LSA's take-off (no pun intended), they may drive down the cost of our planes. In other words, why buy decades-old when brand-new does the same thing? And the license is cheaper?

When adding in the maintenance costs (annual, parts & labor for repairs), I don't think a 150/152 is an appreciative asset. For each hour of tach time, the engine value goes down $6. The average owner flies about 80 tach-hours per year; I don't think a 150/152 appreciates $500 per year in value to make up for that.

Comparing apples 'n' oranges here: is a house still an appreciative asset if one adds in living expenses? IE - electric, water, sewer, heat, property taxes, insurance, repairs, maintenance, lawn care, etc.? Or are all these expenses assumed as the normal cost of ownership, and only the value of the house itself is considered?

I don't think the definition of an appreciative asset should be simply that the total cost of ownership is zero or better. If that were the case, then only stocks, bonds and precious metals are (arguably) appreciative assets and everything else is more or less a loser.

Owning any plane is expensive. The ultimate question is this: does the asset itself (the plane) hold it's value? Can you sell the plane and get another without losing money on the transaction? All things being equal, your ownership costs (fuel, insurance, tie-down, etc.) remain the same, only the tail # changes. I doubt any plane has ever sold for so much more that it completely covered every cost - no plane is 'free'. Just like I doubt a house can sell for so much more one could effectively live for free (although with the rate home prices are rising today...), especially if the dollars are adjusted for inflation.

With a plane, there are owning/operating costs: hangar, taxes, fuel, oil, insurance, and maintenance costs (i.e. repairs/replace parts that are worn out). With a house, there are similar owning/operating costs (taxes, utitilities, insurance) and maintenance costs (repainting, new roof, lawn care, etc). In my opinion, an appreciative asset is something that the increase in value outweighs the maintenance costs. Operating/Owning costs are not factored in.

Hung:

While what you are saying is most correct, and in fact, if one really considers the cost of life itself, we as humans are a very poor investment too.

That said, I was flying with a friend of mine today on one of those 100 dollar breakfast runs, (no we really don't spend 100 bucks for French Toast), and I said to him.... "Frank, only in America can our impulsive dreams fuel our hearts for tomorrow". For me, yes owning a plane is quit similar to owning anything motorized; it depreciates. Taking this one step further then, the appreciation comes in caring for a piece of history with a proven track record. That my friends has yet to be established in the Sport Aircraft, and will not until time itself writes that chapter. All-in-all, yes, the planes value will increase directly proportionally to the maintenance it's been given. Will it cover everything while providing you with the shear enjoyment for which no MasterCard can purchase, heck, no!
But it sure is fun flying.

Just my thoughts.

Herb Rose, N5793E; KZER

Joe-

You paid $1700? Wanna trade? I just found out that Mary Lou has two low cylinders.... bad exhaust valves, I'm told...

Oh well.... I just wrote a check for

[color:"red"] $2000!!!!!!!!!!!! [/color]

[color:"blue"] * * * * * * * * * *S N I F F * * * * * * * * * * [/color]


Oh well..... cost 'o' doin' biznizz, ah gessssss....

Ed,
Did you have to replace the two low cylinders or what! WOW. Ouch. Bam.