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

The owner of the local flight school, brokered the deal on my plane. I told him up front that I didn?t have a clue, that I was trusting him and counting on his expertise. He had flown and maintained the plane for the owner. The deal was $20,000 (IFR, mid time engine, with decent avionics, annual included). Immediately after purchase I had the windshield replaced and did a few other misc. repairs for about $700.

One year later the same guy did the annual and it cost me $5000. (New mags, wiring harness, plugs, starter, starter switch, rudder pedals, all the cables replaced, 5 Ads addressed, and on and on, plus a few things I wanted done?..radio display replaced, tire replaced. I mentioned as I wrote out the check that we seemed to have missed a lot the previous year.

Less than a year later I had the carburetor rebuilt $1,000 + more.(chasing a carb ice issue) Last years annual $1,000. In August 4 new cylinders installed, another $5000. I now have a plane that I will never get my money out of.

I have added Items for my own convenience, Gauges that I don?t need, iceman, davtron, EGT, Air vents that I don?t need Another $1500

Vref on my plane is $22,000

Do I get aggravated about the fact that I will never recoup these costs ?

Well consider this:

Do I simply love, beyond description, flying along lake Ontario at sun set, watching the world light up below me as dark sets in?

Or flying low and slow over mansions in the thousand Islands that I never would have known existed on the ground

Or flying into a small grass strip in the Adirodacks on a beautiful summer day.

Or the one that surprised me the most ?.how much I enjoy just washing and waxing this little plane with the mediocre paint job.

Or the enjoyment I get from learning that others have had the same experiences that I have had and are willing to share them with me here.

I bought my plane in the spring after 9/11. I was going to do this when I retired?. but I couldn?t get it out of my mind that guys, much younger than I, put on their ties and went to work just like every other day ?..we just don?t know?.

So, have I been ripped off ??.I am I a sucker? ?..is this a lousy investment? ?.Have I lost my shirt? ?or my mind?

When I turn that switch and that little 100 hp engine starts ?.well at that moment I don?t think much about the economics.

I agree with every one of your positives here Mick, these things have a value way beyond their monetary price.



Regards,

Joe 150F

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



Hey Mike!

Well, looks like I need what amounts to a top overhaul...

Yep... looks like the cylinders (2 and 3) that at this time last year were running 66/80 and 70/80 are.... get this...

[color:"red"] 13/80 (yeah.... thirteen) and 37/80. [/color]

Go figure. I saw it myself.

So, looks like I'm gonna have all four of 'em... (number one was 77/80, and number 4 was 64/80) looked at. I was told by the chief pilot of the FBO who also is a captain for Continental and two other people, that it is a good idea to have the entire set of jugs worked on at the same time. Oh well.... new valve guides, new exhaust valves...a bit of a honing job on the cylinders and whatever else they do on the pistons and rings.

They said it should be available by Thursday.

Man....

I love flying and owning, but Mary Lou.... lady that she is...

makes me think I've got a HUMAN girlfriend here.


[color:"blue"] Yes, Dear.. [/color]



Should be ready for Saturday's Texas Brady Fly-In. (YAY!) [color:"blue"]I told them that it absolutely positively has to be ready.[/color] So, let's hope. At least I'll be able to wow ya'll with the new-found ooooooomph of fresh jugs and V.G.'s.

On a related note, it seems some of the line rampers at the airport have been just a bit rough on planes. Yup... Looks like they let a towbar fall on the nose wheel fairing a time or two. Yeppers, what was once a pristine, flawless blue and white nose fairing has a few dings from where the towbar fell on it after disconnecting. Plus, it appears that there is a bit of a scratch on the prop - about 4 or six inches from the tip on the outside trailing edge of the prop. Since the prop stops in the canted 45-degree or so position off vertical, it seems that someone got in a bit of a rush when they were repositioning the bird sometime last week, and scratched the black paint and the prop a bit with a towbar. The AI told me when I pointed it out to him that it can indeed be dressed out, but still....


It irritates me for two reasons- first, I strive my utmost to keep Mary Lou in pristine condition. I do anything needed BEFORE the fact to keep her airworthy and looking good. After all, it is [color:"red"] ***MY***[/color] bird that I've wanted since I was four years old in kindergarten (I'm 48 now.... ) and [color:"red"] ***MY*** [/color] a** up there (as well as EVERYONE on the ground beneath me on the line.

Secondly, geeeeeezzzzzz..... these are [color:"blue"]AIRPLANES[/color] for crying out loud, and moreover, not their property... hell...it's MINE, and a quite expensive collection of intricately arranged metal and fluids and instruments, I might add.


You know, years ago, in the early 1970's when I was a lot younger and working out at the airport as a line boy, I made durn sure I was careful. Then, when I was on the ramp at IAH, I made doubly sure I was careful. Hey.... ya know what? I still do. Imagine that...


It's not that hard, people!!!


Thanks for letting me vent.

It's just so


[color:"red"] * * * * * * I N C R E D I B L Y * * * * * *


* * * * * * A G G R A V A T I N G * * * * * * [/color]



I'll shut up now.

Ed,
I don't blame you. It would make me mad also if someone else did some damage to my airplane. They probably didn't even say anything about it when they did it, did they. Probably figured you wouldn't notice it. Luckily, my airport is a small one so any moving of the airplanes are done by the owners, so any damage is our own fault. They do have a person hired to fuel the airplanes but we have to move(taxi) them over to the pump.

A top overhaul Man I know that hits you where it hurts. The pocket book. I had to replace a cylinder a few years back. Went with a Mill. cylinder. Let us know how it goes. Best of luck

I have been blessed so far in aircraft ownership. My first bird, a 72 150/150 affectionately known as the Acme Flying Machine was purchased for $27,500. Owned her for 3 years and a bit over 300 hours flying time. Sold it and recouped everything but insurance and operating costs (fuel, oil, hangar rent).

My Cardinal rang up about $5500 in unplanned expenses in the first year of ownership, but when I ran a 30 day ad to sell it in March at the purchase price plus these expenses, I had one offer that I would have lost a couple of grand and another still pending that would make me break even.

In all, on things mechanical, I feel pretty good if I can break even.

On a positive note, however, My Ovation Model 1537 (Guitar) that I bought for $400 and almost sold in January for the same amount has now been discovered and is trading at around $1500....so at least I score in some areas.

Speaking of appreciative assets (like Jeff's guitar), I recently bought a Seiko on Ebay [cgi.ebay.com] for $60. It's a rare model, like one worn by Sigourney Weaver (Lt. Ripley) in the movie "Aliens". Searching on the Internet, I found out the going price is around $400 to $500.
Seiko "Aliens" Watch [watch-navi.com] (the one with the yellow push buttons)

I watch Cessna 150-152 values and operational costs very closely, and have been doing so on a weekly basis for over 5 years. Based on those observations, here's my opinion on the value appreciation question.

The costs of properly maintaining a Cessna 150-152 airplane eat up any resale value appreciation. The only way I can see to profit financially from C150-152 ownership is to buy an airplane at well below market value, and sell it way above market value. This obviously requires buying from a seller who is either naive or in a cash emergency, and selling to a naive buyer or someone who has allowed their excitement about airplane ownership to override their common sense.

Compared to cars, which depreciate in a rapid and predictable way, airplanes hold their value much better. In fact, when we factor in inflation, it is quite possible for an airplane to maintain 90-100 percent of it's value over a 5-10 year ownership period.

While that sounds great, we have to consider that the cost of ownership is much much higher than a car. Over a ten year period is very likely that the owner will spend more on maintenance than the purchase price.

Not to complicate this too much, but in order to have the full picture we have to separate the costs of ownership into operational vs. fixed costs. The fixed costs are the real story here. Annuals, hangar or tiedowns, and insurance really add up. If you fly the airplane a lot, say 150-200 hours a year, the fixed costs are a manageable part of your hourly budget, if you fly less than 100 hours a year, you pay dearly for the convenience of being an owner. But even though they save money, frequent flyers are ultimately faced with the really big bill (or loss of value) of a engine that requires overhaul.

Bottom line, owing an airplane is very expensive, whether or not you fly it frequently. These expenses eat up any perceived increase in value over time.

We fly because we love to fly, and we pay dearly for the privilege. (Though obviously as 150-152 pilots we pay less dearly than pilots of nearly every other model and brand.)

It's simple logic. It's irrational to expect we can buzz around the sky in our personal chariots for a few years and in the end profit because the chariot has gone up in value. The math simply doesn't support it.

I think you guys are confusing the issue!

No one can reasonably expect to recoup operating expenses on anything, whether it be a house, car, or plane! If you want to sell me something, I'm NOT paying for your past operating expense, any more than you'd pay for mine! Besides, there is no way to subjectively compare one persons operating expense with anyone elses. I do my own repairs and wash the plane myself. The next guy practically pays for an annual once a month, and pays to have it detailed every week! How do you compare these expenses?

If a 150 was worth $25K in 1990, and it's still worth $25K in 2005 (corrected to 1990 dollars), it has had NO appreciation, and NO depreciation. If I bought it at market value in 1990, and sold it at market value in 2005, I broke even, regardless of operating expense (which I would have no matter WHAT I fly)! If I had bought it for $5K less than market, I could have turned a $5K profit, but it didn't appreciate that $5K.

Upgrading is not necessarily an operating expense, either! The cost of replacing a malfunctioning component (like a simple Nav/Com) is an operating expense. The additional cost of upgrading to a GPS/Nav/Com adds to the aircrafts value, and one could expect to recoup at least a portion of this additional cost!

Upgrading merely for the sake of upgrading increases operating expense, with no more gain in aircraft value than replacing a faulty component with an upgrade, as above. You are unlikely to recoup much of the total upgrade cost, here!

These aren't tax laws we're talking about here! Let's simplify the matter, so we're not comparing apples and oranges!

BTW, my $.02 is NOT an "Appreciative Asset"!

Hey, I agree Carl.

I'm just trying to point out for those who are oversimplifying the equation that it neccessary to consider the whole picture. I don't think that anyone would expect to recoup the cost of fuel, oil, repairs, and misc items like battery replacement etc. (notice that I didn't include upgrades in my comments because they are entirely optional)

I just want to make sure that the $2,000-$3,000 per year of "passive expense" owners will have for annuals & insurance are factored into the equation. These costs will occur even if you never fly.

In your example, if you purchased the airplane for $25K and sold it for $25K (adjusted for inflation) 15 years later, you will likely have spent at least $30K in annuals and insurance during that time, regardless of your actual hourly operational costs, or things like hangars, paint jobs, interior refurbishment, upgrades etc. etc.

Of course one can't expect to recover active operational costs, but it's less obvious that you're unlikely to recover "passive costs" either. That $25K airplane would have to appreciate by 100% in 15 years to even begin to cover the fixed costs of ownership.

Airplanes vs. Houses: My house has appreciated more than 50% in less than 3 years. My airplane mostly sits in the hangar, smiling sweetly, with her hand caressing my wallet.

Owning a non commercial airplane can almost never be financially justified. The benifits can only be measured in joy of flight and the satisfaction of ownership. <img src="/ubbthreads/images/graemlins/cool.gif" alt="" />