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Just Plane Investment - how does this work?

Here

They seem to be a GA plane leasing outfit, presumably leasing the planes to flying schools.

I cannot see how this can work. The plane will be trashed (depreciated) faster than you get your money back.

Administrator
Shoreham EGKA, United Kingdom

The way this works? Well, easy, some people lose money, and others get it ;)

always learning
LO__, Austria

It’s a straight forward leasing operation. For me personally the risk feels much too high for the potential return – but it’s clear how money could be earned if everything goes well.

Germany

Did you actually read the website?

It seems aimed at people who don’t know anything about GA, or about much else for that matter

Administrator
Shoreham EGKA, United Kingdom

This is probably the most common form of airplane ownership for flight schools in the US, and there it’s called a “leaseback”. You buy an (often new) aircraft, then “lease it back” to the school for training & rental. You pay all expenses and receive a percentage of the rental income. The difference it is isn’t pitched to most people as an investment, but rather a way to own an airplane at lower cost. Of course if it were really desirable the schools would just lease the airplanes themselves, but it looks attractive on paper. This is how so many schools operate newer aircraft compared to what you see in Europe.

EHRD, Netherlands

Leasebacks were more profitable with new planes before changes in the Federal tax law many years ago. Before that time, people with good jobs who needed a tax write off were attracted to the concept and US FBO/dealers generally didn’t need to buy their own rental fleet. This is where a lot of the Cessnas and Pipers in current service came from. The original owner bought them, leased them back for a while as a tax write off, then sold them and bought another. Meanwhile he always had something to fly.

Another way it’s done nowadays is for a mechanic to buy a plane that is already in poor condition, restore it and put it on the line. He then continues the ongoing maintenance and gets an ROI on his investment in time and money. At some point if/when the TTIS on the plane might start to impact resale value, he sells it and starts over with another plane.

An A&P friend has several planes like this, including an Archer with a new engine, fresh paint job etc that oddly enough he picked up with low time, but in dilapidated and non-airworthy condition in Norway. He flew it to Oshkosh last year before handing it over to the ‘club’. Also a Cessna 170 that looks great but had some structural and engine issues when he bought it at an insurance company auction as a total loss. He had it ready to go in a month or so.

Last Edited by Silvaire at 17 May 13:57

@dutch_flyer / @silvaire – roughly how many hours are these flying p.a.? this guy Peter has tagged claims to get 500 hours guaranteed rental income p.a.!

It depends on the location and type aircraft, but in an area with good weather and a lot of GA activity 500 hrs a year wouldn’t surprise me. That’s a little under 10 hrs a week.

vmc-on-top wrote:

laims to get 500 hours guaranteed rental income p.a.!

Where do you read that? There is a page with ROI calculations for 400, 500 and 600hrs yearly use. Why would they present a calculation for 400hrs. of use if they guaranteed 500hrs?

Peter wrote:

Did you actually read the website?

Obviously! This one statement is off – but they actually do their ROI calculation assuming zero remaining value of the plane – this is quite conservative.
I don’t want to defend that offer: The investor has the full utilization and repair cost risk and the management fee of the company is extremely high!
Model wise, however, this is a very straight forward investment vehicle…

Germany

Malibuflyer wrote:

the management fee of the company is extremely high!

That’s the bit that I saw!

EIWT Weston, Ireland
23 Posts
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