Airplane Leaseback - Do This First

In this episode we look at what it takes for you to make money, break even or worst case scenario, defray the cost of airplane ownership by putting your airplane to work. My airplane went from assembly line to leaseback in 1979 (before I owned it) as a way for the owner to defray the cost of ownership.
Run your own numbers on the spreadsheet at: www.planeviz.com/airplane-lea... Tablet or bigger screen required. Good luck!
[Update] May 2024. I updated the spreadsheet.
- Added spots for Upgrades and Other (e.g., depreciation) in the ownership cost section.
- Changed some terminology from the video: Base Hours becomes Target Rental Hours and Owner/Net becomes Breakeven Gap. The math remains the same.
#airplaneleaseback #aircraftownership #aircraftinsurance #aviationcpa

[@williambeatty7781]

Letting people rent your plane would be tough for many. Especially, letting students bounce your plane off the runway over and over.

[@williamkennedy2069]

Yeah the current prices on all the planes today are just so crazy! So looking forward to seeing what you come up with next week

[@cduemig1]

Awesome breakdown and spreadsheet. Busy around here so might be worth it. Talking to my local school tomorrow.

[@amandawikramanayake4494]

that was an excellent breakdown, thank you!

[@kennymcwilliams8972]

Nice analysis but you forgot a big cost - 100 hour inspections. If you put it in a school house you will have to do extra maintenance.

[@Planeviz]

That's true and I could have used a higher maintenance reserve to account for it. My logs show that many of the 100 hour items were deferred to the annual, which would have bumped that figure up.

[@gazirovkinn]

thank you so much for the video ! def. will look into this business model. sounds so awesome ! we would love to hear how it is going for you so far ! you spreadsheets are greatly detailed and are very clear ! would love to hear more about airplane "leaseback" topic ! thx !

[@johnfitzpatrick2469]

G,day Dave from Sydney Australia. Thanks for the cost analysis of leaseback ownership and excel spreadsheet bookkeeping. I've used Excel spreadsheet briefly in a course: cells, rows and autosum. 🌏🇦🇺

[@AdvTvl-xo1ff]

Excellent explanation. Would you be willing to share the Excel Sheet for customization and learning?

[@ryanfair9354]

Great breakdown - and thanks for sharing the spreadsheet. Clean presentation and right to the point - perfection. Liked and subscribed!

[@danteholton2242]

Thank you for your video! I have recreated your spreadsheet in excel and I’ve got everything EXCEPT the break even rental rate formula. Can you tell me what you plugged into “F1” I’m sure I can figure out “F8” once I know what to do in “F1”

[@KeithDiocares]

how did you calculate the break even rental rate for percentage

[@acfoltzer]

This is a really helpful breakdown, thank you! I've been asking around about financing a plane for leaseback and have found some pretty stiff requirements: newer than 20 years, at least 100k loaned, 12 year terms, etc. This seems to automatically rule out quite a few good training aircraft. Do you have tips for the financing side of the arrangement or do you recommend paying with cash if leasing back an older plane?

[@Planeviz]

Can't speak to the financing side because of variables unique to the buyer. Plus, a CPA (if you can find one with small plane experience) knows more than me. I'm very surprised at the loan requirements you noted, especially the 20 years. Glad you found the video useful. -DG

[@feigenblatt]

Thanks for the helpful video! A couple of questions though: The $20k in upgrades is a one time expense, right? So those numbers apply only to the year you make the upgrades. Also, if this operates like a business, can’t some of those expenses potentially be written off?

[@Planeviz]

Sadly, the days of $20K overhauls for a 4 cylinder are in the rear view mirror. More likely $30K if you are lucky (spring 2024) and don't find any issues. Since you will find issues, $30K is probably the base case. Overhauls are recurring as determined by owner mindset or when the engine tells you it's time. Yes, in a business context ongoing maintenance can be expensed, overhauls likely would be depreciated versus expensed.

[@brandonyork5177]

This is a great video that is helping me immensely. My one question is how you came up with the calculation for your "Breakeven Rental Rate". Any help will be much appreciated. Again great job on this video.

[@brandonyork5177]

Was it difficult to find an insurance company to cover your plane with a leaseback agreement? Also, was it hard to find a bank to loan you the money for a leaseback airplane.

[@pwish232]

Is it possible to get a copy of your spreadsheet? Thanks.

[@billhawkins6959]

Who takes care of the 100 hour inspection now that its being operated by a flight school?

[@Planeviz]

The owner pays, the flight school usually does the inspection as part of the agrreement (often at a discount on the rate).

[@JabariHunt]

Excellent video and tool! Can we purchase the Excel version of the Spreadsheet from you?

[@Planeviz]

Thanks. I will investigate how to do that and update this comment.

[@JabariHunt]

@@Planeviz Please do! I'm willing to buy it...

[@Planeviz]

@@JabariHunt I looked into it. Unfortunately it's not not feasible for numerous reasons. Appreciate your interested though!

[@JabariHunt]

@@Planeviz OK, thank you! I'll put in the time to make one myself.

[@josephalain7]

Can you email me that spread sheet you made please ?