Annual Expense in Owning an ELSA (Good News & Bad News)

[WDD]

Good things to think about.

So, if I take the RV12 example posted above. If I figure I paid $75k used for it, and if I had left the money in an S&P500 Index fund, it would get me after taxes about $5000. Add another $10 per each of the 81 hours to pay for the eventual engine overhaul.


$6775 costs listed in post
$5000 Opportunity cost for cost of plane
$810 Engine Overhaul Fund
___________________________
$12,585 a year, or $1048 a month, or $155 per hour wet

Skipping the opportunity cost for the variable costs, and forgetting about NPV, this is still a good approximation of the costs.

In my case, looking at these numbers tells me that for me buying a plane - if ever - would have to come after I'm retired and can put hours in the air, and have more disposable income (perhaps).

[TimTaylor]

There are pros and cons to owning an airplane. It works better for some people than others. However, before factoring in all the other pros and cons, I like to have an accurate picture of the true cost and go from there. A lot depends on your other goals and responsibilities, etc. Another major factor for me is my wife can't fly due to panic disorder. Spending $60,000 or more on a toy she can't enjoy doesn't make sense to me, at least not right now.

[Nomore767]

[quote="WDD"]Good things to think about.

So, if I take the RV12 example posted above. If I figure I paid $75k used for it, and if I had left the money in an S&P500 Index fund, it would get me after taxes about $5000. Add another $10 per each of the 81 hours to pay for the eventual engine overhaul.


$6775 costs listed in post
$5000 Opportunity cost for cost of plane
$810 Engine Overhaul Fund
___________________________
$12,585 a year, or $1048 a month, or $155 per hour wet

Skipping the opportunity cost for the variable costs, and forgetting about NPV, this is still a good approximation of the costs.

In my case, looking at these numbers tells me that for me buying a plane - if ever - would have to come after I'm retired and can put hours in the air, and have more disposable income (perhaps).[/quote

I AM retired and to be blunt I havent personally sat down and made a financial case for my owning my RV-12 or produced a spreadsheet.
For all the financial factors like opportunity cost and the like I can think of a host of serendipitous reasons such as I just like driving to the airport on a mild Fall morning, pulling my plane out and go fly where I want for as long as I want and look down at the participants in the rat race and delight in being retired.
After a career flying professionally my choice of the RV-12 SLSA was to get the best bang for the buck for me personally flying light sport. My wife and I moved south to enjoy mostly better weather and lower costs and taxes. We succeeded getting more house for less money and taxes than we paid in PA. That money goes towards paying for my own plane.
In PA I paid $490 a month for a hangar 12 years ago whereas I currently have been paying $165 a month for almost 3 years with no increase. In other words I feel I got the best plane for me for the price and good deals on service, hangar, and fuel.
I chose the SLSA because Vans built it and painted it. I got all the options at the time and have SkyView, ADSB IN/OUT plus a/p and paid about $90k less than another model I looked at. My plane will fly 3hrs 20 mins with reserve at 120 kTAS at 4.8 gph. I use points to get free gas cards which buys the plane fuel as well as discounts at local gas stations. Folks in NC drive over to SC to enjoy low gas prices. I can enjoy the light sport mission and be my own boss so to speak.
Buying new has meant manageable maintenance and service and I’ve not gone ELSA so far because I’m not as mechanically inclined or have the time, patience or tools to take advantage of it. I have access to a Rotax trained mechanic who has provided excellent service at reasonable prices. Sure there’s depreciation etc but it’s nothing that I lose sleep over. I flew in a B-17 for $450 and it was a lot for a 45 minute flight but I’d have regretted it had I not done it.

All of which is to say that I could write all the numbers down on a piece of paper and analyse the costs to the penny but I’d still do the same thing.
Owning a plane basically makes no financial sense. There are certainly other things I could do with the money that my advisor would approve of. My wife doesn’t like the plane but wholly approves of me owning mine. The value of that is huge.
I don’t bother figuring an engine overhaul fund. If...IF...I’m still the owner at around 2000 hours on the Rotax I’d just buy another one and sell it figuring I’d be about 82 by then and likely not flying anymore. I might not care about it anymore.
But I’d really like to be able to look back then and enjoy the memory of choosing to own an LSA rather than regret not doing so because it made better financial sense not to.

I hope you can see that I truly feel blessed to be able to own and operate my own LSA but by comparison I know friends who own RVs who’ve spent more than I have on my plane and/or have small boats.

Just my two cents and perhaps a different ( not better) view.

[Nomore767]

[quote="Nomore767"][quote="WDD"]Good things to think about.

So, if I take the RV12 example posted above. If I figure I paid $75k used for it, and if I had left the money in an S&P500 Index fund, it would get me after taxes about $5000. Add another $10 per each of the 81 hours to pay for the eventual engine overhaul.


$6775 costs listed in post
$5000 Opportunity cost for cost of plane
$810 Engine Overhaul Fund
___________________________
$12,585 a year, or $1048 a month, or $155 per hour wet

Skipping the opportunity cost for the variable costs, and forgetting about NPV, this is still a good approximation of the costs.

In my case, looking at these numbers tells me that for me buying a plane - if ever - would have to come after I'm retired and can put hours in the air, and have more disposable income (perhaps).[/quote

I AM retired and to be blunt I havent personally sat down and made a financial case for my owning my RV-12 or produced a spreadsheet.
For all the financial factors like opportunity cost and the like I can think of a host of serendipitous reasons such as I just like driving to the airport on a mild Fall morning, pulling my plane out and go fly where I want for as long as I want and look down at the participants in the rat race and delight in being retired.
After a career flying professionally my choice of the RV-12 SLSA was to get the best bang for the buck for me personally flying light sport. My wife and I moved south to enjoy mostly better weather and lower costs and taxes. We succeeded getting more house for less money and taxes than we paid in PA. That money goes towards paying for my own plane.
In PA I paid $490 a month for a hangar 12 years ago whereas I currently have been paying $165 a month for almost 3 years with no increase. In other words I feel I got the best plane for me for the price and good deals on service, hangar, and fuel.
I chose the SLSA because Vans built it and painted it. I got all the options at the time and have SkyView, ADSB IN/OUT plus a/p and paid about $90k less than another model I looked at. My plane will fly 3hrs 20 mins with reserve at 120 kTAS at 4.8 gph. I use points to get free gas cards which buys the plane fuel as well as discounts at local gas stations. Folks in NC drive over to SC to enjoy low gas prices. I can enjoy the light sport mission and be my own boss so to speak.
Buying new has meant manageable maintenance and service and I’ve not gone ELSA so far because I’m not as mechanically inclined or have the time, patience or tools to take advantage of it. I have access to a Rotax trained mechanic who has provided excellent service at reasonable prices. Sure there’s depreciation etc but it’s nothing that I lose sleep over. I flew in a B-17 for $450 and it was a lot for a 45 minute flight but I’d have regretted it had I not done it.

All of which is to say that I could write all the numbers down on a piece of paper and analyse the costs to the penny but I’d still do the same thing.
Owning a plane basically makes no financial sense. There are certainly other things I could do with the money that my advisor would approve of. My wife doesn’t like the plane but wholly approves of me owning mine. The value of that is huge.
I don’t bother figuring an engine overhaul fund. If...IF...I’m still the owner at around 2000 hours on the Rotax I’d just buy another one and sell it figuring I’d be about 82 by then anyway and likely not flying anymore. I might be wrong. I have few other vices.
But I’d really like to be able to look back then and enjoy the memory of choosing to own an LSA rather than regret not doing so because it made better financial sense not to.

I hope you can see that I truly feel blessed to be able to own and operate my own LSA but by comparison I know friends who own RVs who’ve spent more than I have on my plane and/or have small boats.

Just my two cents and perhaps a different ( not better) view.

[TimTaylor]

Howard, nobody here is saying don't own an airplane. Some of us don't have your money and we need to pay attention before buying an expensive toy. I have owned 3 airplanes in the past, so buying a fourth airplane is not as compelling for me as it is for some people. I have been retired for 14 years and have lived 5+ years past my prognosis. I have to make sure my wife is taken care of for a long time after I am gone. Bottom line, buying an expensive toy is a personal decision for each of us and there are lots of factors, one of which is cost. "Running the numbers" is something I do because of my training, experience, interest, and thought processes. So far, I have no regrets about anything I bought or didn't buy. (Well, I did put in a swimming pool in Wisconsin that made little or no sense).

[Nomore767]

Jim
Don’t know how or why you think my post was directed at ‘not buying an airplane’? You mention ‘ my money’ and i’m flattered but frankly I’m simply comfortable enough to buy a medium priced light sport. You stated you’ve previously owned three planes, race cars and hope to leave a million bucks each to your kids. Not so long ago you decided to buy a SkyCatcher then changed your mind. I looked at buying a SkyCatcher as you know.

My post wasn’t directed at you but more to WDD who sounded like he was contemplating owning an airplane and was talking about numbers in a way that , in my view, is not part of the whole picture. I used my own experience as an example.

We’ve had this discussion before but I’ll say it again. I can’t afford a new 172 or Archer but I could afford a new RV-12. I have a friend who bought an RV motor home and paid a lot more for that than I paid for my plane. Another got a boat for a bit under my planes price. Point is they both believed planes like mine cost a lot more money to acquire and own and were pleasantly surprised at the price and operating cost of an LSA.

This forum has people who are interested or curious about owning, or owning versus renting etc my post is more for them, they can do what they will with post but it’s real world experience.

Only they can determine whether they should or shouldn’t. As you did not so long ago regarding the SkyCatcher.
My post was aimed at showing that there are intangibles to owning a plane other than a spreadsheet that are difficult or impossible to quantify. But they should be factored in, in my view.

As I said, buying and owning a small plane doesn’t make a whole lot of financial sense, but the experience can be priceless.

[TimTaylor]

Yes, I said that too. There are a lot of pros and cons. It's not just a financial decision. If I won the lottery tomorrow, I'm about 50/50 on owning another airplane. Renting works well for my mission.

That said, I would advise the younger generation to make sure you have your other obligations taken care of first, such as sound retirement, health care, kids education, etc. If you can still afford to buy an airplane, go for it. It's a great hobby and not as expensive as some might think.

As far as WDD, it depends on what he plans to do with his $5,000 per year stock return. If he needs that for something important, he should not liquidate that stock to buy an airplane.

Having already done the airplane thing 3 times and spent $100,000 on drag cars and 6 built engines, I've probably spent more than my share of mad money. And yes, I have objectives as far as taking care of my wife and leaving something for my kids. Again, it's a personal decision we all make based on lots of factors.

[Jim Hardin]

As an aside, I have a spreadsheet I use to calculate our net worth each month to age 100. I'm trying to leave each kid $1,000,000. If I add one dollar of spending per month, that reduces our age 100 net worth by $763. Yikes! Kinda makes me not want to buy anything. And, I'm invested very conservatively.

Might want to consider learning to darn socks

[Type47]

If you listen to someone’s advice.
And do exactly as they say.
You will have exactly what they have.

[WDD]

My calculations were for me to better understand the costs and a way of analyzing things (wife would call it a compulsion LOL).

We all have our priorities in life. Mine right now is to make sure we hit retirement age with enough assets so we can do very cool things at that time, such as give outrageously to church and what not, travel, own a plane, etc. So if I forgo the luxury of owning a plane today and let the money build, will be able to more things in future.

Retired, living in the south, great flying weather, own a plane - who doesn't aspire to that! If I'm smart now, I'll be able to get there.

[Nomore767]

That’s what my wife and I did! Hope it goes as well for you and your family!

Um I’m not breaking Paul’s heart today...25F and overcast in SC when I flew this morning. Rotax started right up but I added an extra strip of metal tape and the oil temp was 219 and coolant just barely in green to provide cabin ‘heat’!

[foresterpoole]

I'm glad to see I'm not the only one that geeks out on Excel! I took a very hard look at ownership vs renting recently. My costs were lower than some on this thread for hanger space and fuel costs (100ll or mogas). However, the sales tax in my area is a whopping 10.5%, and that sucked up a lot of capital, as did insurance. In the end I'd have to fly 100+ hours a year to beat the 96/hour wet for the Tecnam. The FBO also has 2 172's the N model is 110 wet the other SP is 145 wet, those prices are pretty good as well. Bottom line I just don't fly enough to justify it, much to my displeasure. The only issue I have is scheduling, all three are used for flight training, so it's pretty competitive and good luck finding overnight availability. Since this is the southern US, I do luck out on Sundays, usually that's open!

[TimTaylor]

One thing some people here seem to ignore is many people don't have lots of excess funds available. For these people, a very accurate and realistic financial analysis is needed to determine if aircraft ownership will work. If they are 20 or 30 years away from retirement, it gets even more difficult because there are a lot of things competing for their money and there is a lot of uncertainity.

If you are already retired and have your retirement secured and have excess cash available to buy an airplane, it's a much easier decision. In this case, depreciation, engine reserve, and opportunity cost are of little or no consequence. It would be good if people would realize that everyone has their own unique situation that only they can evaluate.

[Nomore767]

Eddie my calculations are very close to your costs. I did have an additional big item the Sprag Clutch that I did. I wish I could have got another 20 hours in, but like you things got in the way.



Bottom line like the Master Card commercial should say "still priceless flying your own plane"

The numbers for my RV-12 SLSA are VERY similar to David's :-

Hangar (12 x $165 month including utilities) $1980.00
SC Property Tax $1385.00
Insurance $1306.00

Total Fixed Costs $4671.00

Bi-annual transponder check $450.00
Maintenance: $1056.00
(includes annual,oil change, parts,new tire
brake pad and rotors repair)
Subscription for Dynon SkyView updates $ 0.00
Fuel 256 x $1.92 $ 492.00
89 hours x average 4.8 gals = 427gals
fuel is 93 E10 using store discount card
$2.40 - 20% discount = $1.92 x 427
60% was at a discount, 40% was free using
rewards gift cards

Total Variable Costs $1998.00

Total for Year $6669.00

Total per month $556

Total per flight hour flown $75.00

If I didn't have the free credit card points gas cards or the grocery store gas discount:-
Total cost for year rises to $7269 and the hourly rate based on hours flown becomes $81.67, very close to David's numbers.

[MrMorden]

$65 for plugs on a Rotax 912? I hope that include labor, the NGK plugs are less than $5 each!