How to Own Your Plane for FREE!

hey everybody how you doing today this is Mike Webb if you've always thought about buying an airplane but you were concerned about how you were supposed to cover all of the costs yourself and maybe you don't want to have a partner in that airplane stick with me today I'll tell you about how you can finally afford that plane you've always wanted [Music] the topic of this video is an aviation lease back on an aircraft is it a good idea is it something you should explore how has it worked out for me etc so the bottom line is this all started out when I it was a student pilot I had gotten my private pilot's license I was working on my instrument rating and it occurred to me as it does to almost all pilots at some point in their training careers or after they've gotten their licenses I'm spending a lot of money renting these planes would make a more sense financially to own my own plane and fly that instead of renting a plane from the FBO so I started looking into aviation lease backs I'd seen an article about the idea that buying an airplane and then putting it on a lease back with a flight school or an FBO could be a good way to curb those costs now for those of you who aren't familiar with what a leaseback agreement is it's where you as the owner decide to have your aircraft on a rental line or in a club potentially someplace where you're not the only person who can fly the airplane and in return when they rent that aircraft you as the owner get a certain percentage of the rental rate now depending on the arrangement you have with the FBO the flight school that commission or percentage could be different it really all depends on the arrangement you have with your particular FBO so I started looking into this thinking is this something it would work for me the bottom line is there aren't very many answers online and it certainly aren't very many videos on YouTube that I could find talking about anybody's experience with this what I did find was a lot of people saying it's a horrible idea between the forums on the internet chatroom the overwhelming response was that it's a horrible idea for an owner and the only people who whatever works out for the FBO or the flight school well I can tell you that I wasn't particularly encouraged by that response but I kept looking into it for myself and I decided that maybe that those people's experience we're not necessarily the same experience I was gonna have was also talked about the fact that your airplane will get destroyed by all the other renters and then if it's your baby that do you really want to put your airplane into that sort of environment where it's going to get treated poorly by all the renters and the students hard landings etc but again here's why I'm doing this video there were no answers out there that I could find nobody had anything positive to say about the lease back experience this is why I'm doing this video I've had enough experience now that I feel comfortable talking about my experience I've also had several people reach out to me who have met me through my pilot training they'd heard through the grapevine that I was doing this through my FB o in flight school and they wanted to know how they could potentially go down this road too so that's why I'm doing this video today so I've had enough experience now I believe where I can try to tell you exactly today what I think you should be considering if you're looking at a potential lease back of an aircraft you own so there are a bunch of things to consider here okay first and foremost and most likely not most likely definitely the most important thing in this entire situation is you have to have the right plane for the right school has to be a good fit the right plane with the right school success the wrong plane with the wrong school not a success I think your best chance for success with the leaseback is to find a flight school or an FBO in a busy metropolitan area that has a lot of training activity and a lot of renter's if you live in a rural area and you're thinking about buying an airplane and putting it into the FBO where there's maybe four or five pilots in the local area who do all the flying and the flying they do is very sporadic and just the occasional hundred dollar hamburger leaseback is not going to be a good solution for you find a plane that fills a crucial need at an FBO or a flight school for instance if your FBO or flight school has a lot of pilots that are hoping to get their hands on an airplane where they can earn their high performance endorsement you bringing one on board could be a great way to meet a need but also make good money another good aircraft to bring on board is if you own a complex aircraft flight school or FBO that you're looking to work with doesn't have one that would be a great idea to make some money pilots are always looking to add endorsements to their portfolio and a complex endorsement is a really important one to get complex airplane is defined as having retractable landing gear the constant speed prop and movable or adjustable flap and finally another opportunity to explore would be if you brought a technologically advanced aircraft or taa on board to a flight school a technologically advanced aircraft is designed as one having an electronic primary flight display or PFD multifunction display or MFD AF are capable GPS with a moving map and a two-axis autopilot another good way that you can provide value to an FBA or a flight school and it'll increase your chance of success as a leaseback owner is to take a look at the existing fleet of aircraft that are available and find out where you might be able to bolster and support the existing aircraft that are busy or find an entirely new avenue for renters and pilots to explore so an example of that would be if you're at a flight school where they have a couple 172s and those 172s are flying all the time then perhaps providing another 172 will help those people have more choices when inevitably the aircraft that are there or down for maintenance so if you're at a flight school where there's a bunch of students and they've chosen to train on one platform like the 172 or the pa-28 series or perhaps the diamond series da 20s etc if you look at their existing fleet and you find that they have three da 20s and they all fly a lot well maybe adding a fourth da 20s not the best idea but they have one PA 28 that one flies a lot but when that one goes down for maintenance what are the pilots supposed to do well again adding another PA 28 in that scenario might be a great chance for success because you've now added some backup redundancy to those people that are choosing to fly a PA 28 here's one more way to look at it people generally like to choose a platform with which to train or fly and they want to stick with it adding more planes options into a certain style or type that is already doing well at the flight school might be a pretty good way to go after all pilots do like to Train and consistent types of aircraft and we all have our favorites and when we find them we like to generally stick to them okay so here's another pretty important thing to consider when you're looking at a leaseback opportunity is the maintenance that's being done at these Hubbs or FBOs or flight school is the maintenance being done in-house or do they shop that out in other words if your aircraft is part of this FBO or flight school when it needs to get its 50 hour or its 100 hour or annual inspection do they have folks in-house that can take care of that and usually that means at a faster rate or do they need to find solutions outside of their own place if they do have an in-house maintenance department and it's well-run that can save a lot of time and energy when these things inevitably will come up it's not a deal breaker if they don't have their own in-house maintenance maybe you have your own personal mechanic or somebody you know that you trust and it's done a great job for you if that's the case there's nothing wrong with that but just keep in mind that when maintenance items do come up speed and turnaround time is of the essence and I mean quickly your nemesis as a leaseback owner is downtime aircraft on the ground not a good thing for anybody involved you don't make money the FBO doesn't make money no one makes money as long as your archive just sitting on the ground not flying and another thing is as a pilot myself if I like an aircraft but it looks like it seems to always be down or when it is down it takes forever to come back up I'm gonna lose faith of that aircraft is gonna be available on an acceptable manner for me to continue to fly with it if you take too long on these issues they may just choose another plane to fly with in general okay so I mentioned before that it's been good for me so let's talk about how it's actually working out for me so I bought a PA 28 and added it to a flight school that I was already training at it was a little slow at first but eventually it picked up and a lot of that has to do with circumstances that were out of my control as they will be in any situation but I did take a few steps to proactively increase my chances of success specifically I wanted to make my plane as attractive as possible to students and renters alike and a great way to do that as I did some avionics upgrades so avionics upgrades aren't inexpensive by any means but I made some very specific choices that I wanted to see from myself and my own airplane because after all I do own it but I also made a big effort to make sure the avionics upgrades that I did would not just benefit me as the owner but would make it more attractive to anybody who wanted to fly my plane and I can confirm that those changes that I made really did lead to a lot more interest in my airplane everybody who's flown it says they were great choices now I'm probably gonna make an entire separate video about those avionics upgrades that I did to my plane because certainly I was looking for information before I made it and if I had found a lot of videos that had the specific components I was looking to upgrade in that would have been wonderful so here we are now the avionics upgrades were made the plane became a lot more popular it's flown a lot more and how am i doing now well in a short word awesome 2019 was a great year for me the plane flew a lot more than I expected what that means is that I'm getting the hours I need as a pilot by flying my own plane when I want to but it's also making revenue for me when I'm not flying the plane when I do choose to fly my plane I don't have to pay the same rate as everyone else I can if I want or I can choose to log them as owner hours which means I just have to pay for the fuel now an important thing to consider is I do have to reserve my plane just like everyone else on the schedule just because I own the airplane doesn't mean that I have the opportunity to bump people off the schedule I have to play by the same rules as everyone else and in my opinion that's a small price to pay for the fact that my airplane is costing me nothing to own ok let's talk about the big broad general numbers of what it's like to own your own airplane on lease back ok as any ownership of an airplane there are expenses fixed and variable you want to make sure that your airplane under a leaseback agreement is gonna fly enough that hopefully all of your fixed costs will be covered from the revenue coming in from the leaseback agreement now it doesn't necessarily need to cover all of your expenses to be considered a successful lease back that's your personal choice your personal barometer maybe your lease back only covers some of your ownership costs and to you that's just icing on the cake and that's great if your if your goal is just to own an aircraft you've done that and maybe some of your costs are being offset but if you heed these rules and these guidelines that I'm talking about today you have a pretty good chance that it will cover your entire costs of ownership for your airplane I'm gonna make another video most likely where I break down some of my specific personal experience a little more in detail but today we're just talking about in general how this has worked my situation has been so great that not only has have I been able to fly for free essentially and own an airplane for free it's gone so well or I'd be able to reinvest in my business and actually add more planes to my leaseback business if it continues to work out the way it has I'll just continue to build upon the business and let it grow as quickly as a camp but anyway here's the bottom line if you've been on the fence about how you can afford to buy an airplane this is something to consider lease back agreements keep in mind however that if it doesn't pick up as you had hoped you will have to cover all the expenses of ownership of course the fixed and the variable costs which is why again finding the right plane and the right place is extremely important for this whole strategy to work another thing your plane will get wear and tear I would suggest strongly don't get too emotionally attached to the airplane I know you like it you think it's your baby it is your baby but the bottom line is it will get a little more wear and tear than it would if it was only you flying it and of course that's to be expected and finally remember that a good healthy relationship between you and your leaseback partner is paramount to any of this working you're not their only concern you're not their only customer and it will serve you well to remember that at all times when things get bumpy and inevitably they will whether it's a maintenance concern renters that are treating your plane a little less well than you would have hope or it's a slow time in general and the revenue isn't coming in the way you've come to expect keep in mind that they're in this with you and you're in this with them if you follow the guidelines and the general rules that I've talked about today you do have a good chance of success why do I say that because it's worked for me I can speak from personal experience anyway guys I hope you enjoyed this video if you did do me a favor subscribe to my channel hit that like button wherever it is and look for more videos for me in the future see you next time

Channel: Mike Webb

Views: 65,826

Rating: 4.8805971 out of 5

Keywords: aviation, leaseback, private pilot, free, airplane, plane, general aviation, GA, ownership costs, maintenance, how to afford a plane, mojogrip, aviation101, aviation business, lease, flight school, fbo, avionics, garmin, upgrades, how to buy a plane, flightchops, starter plane, cheap plane, aviation leaseback, leaseback airplane works, aircraft ownership costs, flight school leaseback, flight school plane, FBO, aviation business ideas, aircraft ownership

Id: BO08LUqchW4

Length: 12min 49sec (769 seconds)

Published: Mon Mar 23 2020

Reddit Comments

[u/satans_little_axeman]

Starting off that way is a little confusing... "If you want a plane but don't want a partner you personally know and vet, consider instead having many partners you don't personally know and vet"

A lot of the more financially feasible options involve subsidizing flight schools by owning something really boring, or something that won't get a lot of hours.

Glad it seems to have worked out for you though. Overall one of the best-rounded takes I've seen on this topic.

[u/Esquire99]

Leasebacks work out ok for very few people. For most, they’re a financial disaster and at the end of the arrangement, the owner’s plane is in much worse shape.

[u/pokeurface]

If I were a School/FBO/Club and my leased plane was flying a lot and making money I would cut out the owner and take out a loan and buy an airplane. It’s all about risk. I’m sure OP has money in the stock market, real estate, etc. Owning the airplane and leasing it out is just a way to spread his financial risks and get some returns from the original investment of buying and upgrading the aircraft. It’s a business decision for him just like the FBO that is renting from him. They don’t want to spend money acquiring another aircraft, so they just him a cut to borrow his.

[u/KC10Pilot]

Couple questions I had:

How do you keep track of the maintenance and make sure the FBO/flight school you are leasing it back to, who is also doing the maintenance, isn't fucking you over by doing unnecessary maintenance or over charging you for said maintenance?

When you are flying the airplane, how much money is the FBO/flight school making?

How are expenses for fuel handled?

[u/[deleted]]

Very few leasebacks I've seen actually generate a profit. Many simply help offset some of the owner's fixed costs. Insurance, tie downs, etc.

I'm willing to bet that the extra maintenance costs from letting students beat the everloving shit out of your airplane isn't worth it.

[u/myquebflyinfree]

I made this video a bit back to answer a few questions I've gotten from several pilots about my leaseback experience. There weren't many out there when I looked into it, so I hope this helps some of you.