Let’s Ask Jim?


Question from Randy in Texas:

I have a Private Certificate and know that I am going to spend a lot of time and money as I progress through Instrument, Commercial, and maybe even CFI. My question, should I buy an airplane and put it on lease back so that it can make enough money for me to fly it free? At least that is the way it was explained to me. I am looking at a 1978 Cessna 172 for $65,000. Is this a good deal?

Answer from Jim, not a fan of Lease Back!: I think all this should be put in writing, a contract if you will. Take it to someone that can explain it to you from a legal and financial point of view. I’m sorry if I have a negative idea about the advantages of lease back. If you have too much income and are looking for a write-off with the IRS, lease back works. If you need to make money, it does not. This is a job for old pencil and paper.

What is the total operational cost for this airplane per month (finance payment, insurance, 50-100 hour inspection, Annual, set-back for new engine, ramp fees, hangar or parking fees, FUEL, other miscellaneous expenses)? Now that you have a number to work with, how many hours must it fly in order to pay all this? Divide the big number by the little number. . .Will it? There has to be some guarantee to you that it will or you get hours on the airplane and lose money. Don’t just take my word for it, someone else on your airport has done this deed before. Find them and see how it worked for them, if at all.

Not much free in this world, almost nothing in aviation except friendship. Keep me posted.
Jim Trusty (Lrn2Fly@bellsouth.net)