Share vs. Hire - Pros and Cons?

[ayavner]

Hi all,

 

Just got to thinking, as I am convinced I will never be able to afford my own aeroplane, the options available to me are either hire or purchase a share. So this got me to thinking, as one who has sat through the full 4-hour time share condo spiel in Mexico and ultimately rejected the idea.

 

The basis of the share was I pay whatever $$ up-front, then i have access to use the condo whenever I want. Which sounds great until I work out that a) I'd have to visit and occupy the room a helluva lot of times to make up the cost vs just renting a room and b) they seemed to be playing me on the idea that accomodation was as rare as hen's teeth, and best to have this available in case my holiday is spoiled due to lack of availability.

 

I have never found, with adequate planning, any shortage of great rooms at a reasonable price, so ultimately it wasn't for me. And it would also lock me into that destination for the foreseeable future if I wanted to see a benefit. Some people love it. Dunno.

 

Now - back to aeroplanes. Is there some facet of the share scenario which would make it beneficial vs. just hire? I can imagine it is nice to be one of a known number of people flying it, and all that but...

 

a) reduced rate? is the difference between the reduced rate and normal hire price enough? Still seems like you would have to go up a lot to recoup the cost of the share in hire rate difference.

 

b) if 5 people are sharing a plane, is it that much likelier to be free on a given day that I want it?

 

i am sure there are other considerations, but is this just under the surface a status thing? What else is there to consider? I can be swayed one way or the other, would like to hear from others who have either done it and love it, done it and hate it, or considered it and rejected the idea, or are still considering.

 

should this be a poll?

 

adam

 

 

[Ivan B]

The other big question is where it will be hangered, who is flying it and when. As you know weather can ruin weekends for weeks, then everyone wants to fly on the same weekend.

 

And every hour you fly you would still be required to put somthing it the kitty. The other issue is who is going to clean the aircaft, One person my do a very good job and put in a lot of effort and another my do a crap job leaving you with a bug covered aircraft:crying:. Then who pays for upgrades when you are happy with the setup and someone else isn't. In a perfect world shares sound great.

 

Hire is more expensive but you can usually get an aircraft when you need it, At the end of the flight you can just leave it not spending the next hr cleaning. Also when major repaire(s) are needed you don't have to have the money to fix it or worse wait for another person with a share to have the funds so you can fly your plane.

 

I have thought about this myself and although I have very limmited flying time and time around RA. I have come to the conclusion it is either better to hire, or purchase a safe but maybe less efficiant aircraft eg slower than you would like and less fuel carry capacity (More stops and time to get to where you need to be).

 

I'm sure other people with real experiance about this will give you their opinion.

 

 

[facthunter]

Control of maintenance and who flies it is maximum when you own it and have an exclusive hangar. As you share a hangar with more and have more in the group you lose the assurance of the control. If everyone around you do the right thing that may be ok. Access to the plane when YOU want it will be better if your requirements are midweek same with getting it from a school/club. IF you want to be involved with the plane and learn things about it that may affect your decision too. ( back to owning one or sharing one)

 

I would start out by doing a deal with a good school/club especially if you may want to use it at a time they don't have a heavy demand for it. If you do say three days with 6 hours each day that might attract a good rate and if you want to do a trip from a to b and the total time is only 4 hours over the weekend that might not be available. You want a school that has a few planes and you have to be happy with their maintenance standard. and the solo rate is OK for the type. Nev

 

 

[metalman]

I've looked at the figures and both sides of the owning against renting argument ,and it makes perfect financial sense to rent until your doing a certain amount of hours a year,,,,,then I finally got my own aircraft and I have to say, all the debate is pointless, there is nothing better than being able to head to the airfield after work and just do a half hour , there is nothing like knowing the plane will be exactly how I left it, there is the nicest feeling of being able to just saunter around the sky without thinking of how much this'll cost, there is no financial reason for owning your own aircraft but I am lovin it .

 

As for a syndicate I reckon it's a good way to share the cost, but it would depend a lot on the people your in with, and the number, three would be about the most, and being crystal clear on responsibilities and expectations.

 

It also depends on what you want, you can buy a real nice older plane ( lightwing, gazelle ,drifter, jabiru) for about the same as a third share new aircraft,

 

 

[Guest nunans]

I think hiring is the cheapest especially if you dont do many hours, a syndicate share is one way to use an expensive plane without the big cost and owning is probably the dearest but the most controlled and best availability etc.

 

There is a big difference between the cost of buying a plane and owning a plane. The buying bit just means swapping some money for a plane and down the road you swap the plane back for some money, less money yeah but its not costing you the full purchase price to buy it. just the depreciation.

 

owning however is where the big costs are and this money is gone forever. how much depends on who does the maintenance, hangarage, if you like insurance etc, and how much fuel you want to burn.

 

 

[Gnarly Gnu]

It's slightly irritating that the aircraft I hire are kinda like taxis. Well maintained but a little grubby workhorse and I keep seeing little things I would like to fix / neaten on the instrument panel etc. But then I look down and see the vinyl floor with mud from last year.... the idea of having some ownership & say on the maintenance is appealing but as other have commented probably not so economically viable unless I'm putting in a few more flight hours. It's also sweet to be able to land, park and pretty much walk away... that is worth money too as is being able to pick a different aircraft at times.

 

Bottom line like the condo how many hours would you realistically use it each year determines the economic viability and economics aside what the other syndicate members are like probably determines your overall satisfaction.

 

 

[sfGnome]

If cost is the total determinant, then hire. Choice et al have done studies that show that it's cheaper to hire a taxi all the time than own a car. Question is, do you want to have to wait for a taxi every time you want to go somewhere? That's why so many (but not all) people own cars. Having said that, I expect that being in the 'wrong' syndicate would be like being in the 'wrong' marriage. You have to be really careful to make sure that you're all on the same wavelength before you lock in.

 

I've been lucky and have really good partners. We don't always agree on everything, but everyone listens and we have always found a consensus (and, as MM says, there's nothing like thinking to yourself "Hmmm... nice day" and just toddling off to the strip and finding your A/C exactly how you left it, ready and raring to go).

 

 

[Head in the clouds]

I'm sure there are plenty of others but I only know of two syndicates that worked well.

 

The first was two men who built a Thruster kit together, this was in the days before two seaters, and they built a trailer and used to go away almost every weekend and camp in the trailer at different airstrips, it meant there were two of them to assemble and disassemble it, and they flew it in turns. Could not have been a better arrangement. Better still their wives were golf fanatics so they went playing golf together each weekend.

 

Syndicate two was about 6 men and one lady, two of them were late teens, the rest in thirties and forties. I don't think any of them had much money so they bought a cheap aircraft, it was an early Lightwing. They put it into the care of a third party LAME who was responsible for the maintenance, cleaning and fuelling. The LAME got his AMEs to do most of the fuelling, cleaning etc. They had the aircraft insured and also put it on line for hire when none of the syndicate was using it, so they covered the costs a bit from hire fees. They never hangared it, they had fabric covers for it on the tie-downs instead.

 

To resolve the booking issues anyone could book the aircraft at any time but had to pay for the booked hours at the time of booking and it was non-refundable unless rain cancelled play. That way they rarely seemed to have a conflict for usage times.

 

There's a refurbished Drifter for sale on this site at the moment for $12K. It would make a good syndicate start. Four people put in $4K each would provide an initial maintenance fund of $4K, and cheap flying for all if they set the usage fee at about $45/hr it should cover fuel, maintenance, insurance, engine rebuild etc. Then hire it out at $90/hr would also get plenty of takers I would think. Minor bend, you spend, major bend the insurance kicks in. And you can always sell your share when you've got other options.

 

 

[metalman]

It's slightly irritating that the aircraft I hire are kinda like taxis. Well maintained but a little grubby workhorse and I keep seeing little things I would like to fix / neaten on the instrument panel etc. But then I look down and see the vinyl floor with mud from last year.... the idea of having some ownership & say on the maintenance is appealing but as other have commented probably not so economically viable unless I'm putting in a few more flight hours. It's also sweet to be able to land, park and pretty much walk away... that is worth money too as is being able to pick a different aircraft at times.Bottom line like the condo how many hours would you realistically use it each year determines the economic viability and economics aside what the other syndicate members are like probably determines your overall satisfaction.

I have found it bloody annoying to rent an aircraft that is dirty in and out, if a car hire mob handed me a car in the condition I've rented planes in I'd throw the keys at them, I understand its not possible to wash a plane every flight but when a see the same crap on the floors and the half dead bugs know me on a first name basis it's time to clean the damn thing.

 

 

[Gentreau]

As a wise man once said:

 

"If it flies, floats or f**ks, it's cheaper to rent than buy"

 

 

[ayavner]

Great discussion, exactly the sort of input i was looking for! Very helpful, carry on!

 

 

[Yenn]

It may be cheaper to hire, but the ability to have the plane when you want it is worth a lot.

 

I have read a bit about syndicates and they can be good or bad. cleaning is one of the bones of contention and the good syndicates seem to have someone esponsible for cleaning, paid if necessary. Insurance is the other problem with varying degrees of experience of pilots.

 

Having just about finished a GA plane I am considering selling one or two shares in it when the test period is flown off. That way I should recoup some money and also cheapen the hourly rate of flying.

 

 

[rgmwa]

The problem is that a syndicate reduces both cost and responsibility, but not necessarily in equitable proportions. I think I'd rather own a lesser plane than less of a plane.

 

rgmwa

 

 

[Guest nunans]

im really lucky in that i can hangar for free. so that takes away one of the biggest owning costs. and yes theres alot to be said for being able to fly a plane not worrying about what the hour meter says when you get back or if the other members will be peaved at youfor leaving it not clean enough. if i couldnt hangar for free id probably be hiring or sharing.

 

 

[408059]

A slightly different view.

 

If you want to go from point (a) to point (b), or just do an hour or two flying on the weekend, and the local school has reasonably available aircraft to hire, then you hire. If you have special wants or needs, for example, you want to fly vintage aircraft, or amphibians, or do aerobatics (GA), or drop in to see friends who have a 400m strip nestled in amongst hills, or do super fast cross country trips, then you should consider buying. Syndicates are fine provided the group is stable and you document up front your expectations on use, maintenance and upgrades. My preference is for sole ownership but there are down sides. Cost aside, it is the inconvenience of fixing problems when things go wrong. You have no one else to share the load, unless your LAME has the hangar next door to you. Also, when you are tied up with work or home life and the aircraft hasn't been used in 3 weeks you worry about lack of use. Mind you, the need to 'turn the engine over' has convinced my 'better half' many times over the last 15 years that I should go flying.

 

Steve

 

 

[rdarby]

I belong to a good syndicate, and it's costing me half what it did to hire. However I had to front up $8,000 to buy into the syndicate. Over 5 years I will break even in the savings from my hiring days.

 

If you find the right syndicate, and each share is cheap enough, and it's really the right group of people with some unofficial leaders in it, it can be a lot cheaper.

 

You can't stop flying so easily once in a syndicate, but you can if you just hire, as you have no skin in the game, and that is worth something to me.

 

 

[ayavner]

so... there is a break even point, that's good to know. makes sense rdarby that you will also tend to fly more if you feel the sense of ownership, that might also hasten the break even point, as you might fly more in a month than you would if you were hiring.

 

Lots of food for thought here, I imagine since I am just starting out in aviation relatively late I will probably try all combinations of things before i settle on what works for me.

 

 

[Yenn]

I see in the magazine, ad no 3249. A JabJ230D 1/6 share for $16000. $140 pcm, which I assume is per calendar month. $70 per hour.

 

Is a Jab worth 16 * 6 thousand, ie $96000? Maybe. There is one advertised at $85000, but it has a fair bit of use and probably will need engine work before long.

 

$140 * 12 is $1680 and assuming you fly 50 hours per year it comes out at $103.6 per hour, plus interest on your outlay, but you should get a return when you sell your share.

 

My first thought was that is expensive, but after working out the numbers it looks pretty good to me.the J230 is a good fast, stable plane and easy to fix any defects, also keep clean and no corrosion problems

 

 

[rdarby]

I used the same sums as Yenn did to work out if I could fly for more or less for my set monthly budget. I have x per month to spend on flying, and I worked out that the $70 a month we pay, plus paying back myself for the cost of the share over 5 years, gave me y left over, and y at $70 an hour gave me slightly more flying time. Once the 5 years are up, I get a lot more flying time for the monthly budget.

 

But yes you do now need to clean it, help out with maintenance etc. But it's actually quite fun to do some of the ownership chores, and I have learned a lot.

 

But I think that what makes our syndicate work is that there are some strong leaders that in fact do more than their share. It should be equal, but in reality I think you need someone to be a driver. That is just how humans work. I am very grateful for those drivers as they are the glue holding things together.

 

 

[metalman]

$1800 per year insurance

 

$3200 per year hangarage

 

$500 per year airfield maintenance fee

 

$5500 fixed costs

 

Per hours costs

 

$30 per hour fuel PULP

 

$12 per hour engine replacement ( 2000tbo)

 

$20 per hour maintenance cost

 

$5500 per year converts into $55 per hour if I do 100 hours per year( will do more than this easily)

 

$62 per hour plus the $55,

 

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

 

I've never actually sat down and worked it out ,but at $107 per hour it leaves me a bit of room before I'm cheaper to rent, and if I find someone to share the hangar( at YCEM ,anyone???) my costs come down a fair bit again.

 

For this cost I get the plane whenever I want it ,exactly as I left it ,I never have to wonder what the last person has been doing in it, and if I want to do a trip and divert for whatever reason ,for whatever time I have no "next renter" to concern myself about, pretty good value really

 

If I've missed something in the figures ,do tell, it's interesting to look at what it all cost, I generally just do what " floats my boat" and then work my ass off to pay for it, maybe not the best way but I've had some fun with toys,

 

Cheers Met

 

 

[rdarby]

Good breakdown Matt. The only part you haven't included, but what I did in my original figures to decide if I should buy or not, is factor in the cost of the plane. Or the cost of the syndicate in this case. Either you include a figure for lost interest or to pay yourself back the money, or you don't if you have saved up for it or just don't care about it. You have to spend on something!

 

I worked it the other way. I started with $500 a month being available, and then worked out how to get the most flying for the money. The syndicate did it, as the costs you have above are shared, and I still fly the same. If you own the plane yourself you pay for it to sit in the hangar. This way I get someone else to help with that!

 

But it's not always exactly as I left it, and it gets consumed quicker, but with a great bunch of syndicate members it works out well.

 

 

[ayavner]

I generally just do what " floats my boat" and then work my ass off to pay for it, maybe not the best way but I've had some fun with toys,Cheers Met

Won't get an argument out of me on that Met, I think that is the best way! Whenever I am spinning my wheels at my job or discontent or wondering what its all about and why am I even working here, i just remember "it pays for some pretty cool sh#t"!

 

 

 

[Kyle Communications]

Ryan

 

Your 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

 

 

[ayavner]

What about owning more than 1 share, does that get you anything? Thinking of these ads I see a share of a Jab or Gazelle or whatever... what if as people leave the syndicate, you buy the shares - is that a good way to work your way into eventual full ownership? Or would it end up costing more that way in the end (haven't done the numbers)? Would having multiple shares give you more preference on flying time, or just more burden?

 

 

[rgmwa]

Would having multiple shares give you more preference on flying time, or just more burden?

I think that would probably lead to a first and second class membership mentality that would be detrimental in a syndicate. Equal shares would be much easier to manage and should result in fewer arguments over both flying time and running costs.

rgmwa