Leasing your airplane to a flight school or other
business CAN be done successfully for PROFIT! Learn the essential
considerations of a
Leasing your airplane to a flight school or other business CAN be done
successfully for PROFIT! Learn the essential considerations of a
"win-win" arrangement before you lease.
1. Am I "O.K." with the idea of other people
flying my airplane?
Are you really? Regardless of the revenue
generated from the leaseback, the arrangement is not successful if
you're constantly worried about who's flying your airplane and how well
they're taking care of it. Sure, you need to be concerned about these
things, but if you can't see your airplane as a "tool" you need to
reconsider. NOW
2. Do I know what I want out of this leaseback?
Decide what you need to achieve with the
arrangement. Are you looking for a
tax shelter?
way to reduce the cost of flying?
profitable business?
Start with the end in mind and make sure you keep
your eye on the ball. All other considerations depend on your
objective.
3. Have I done my "due diligence" when choosing a
flight school with whom to partner?
How do you know if you've made a good choice? A
good flight school will have the right number of airplanes (to best
utilize each one), the planes on the line will be well maintained and
clean, and the flight school procedures will be well defined. Ask for
references, and determine how the current fleet is cared for. Remember,
you're not only choosing a business, you're choosing a business
partner! www.airplanenoise.com/answers_to_why.htm
4. Have I chosen the right aircraft?
Of course, this depends on your objective(See
Point 2). For maximum revenue, choose a 4 place IFR airplane. A Skyhawk
is probably accepted as the best renting airplane. You should also
consider the age of the aircraft. While an older aircraft may cost less
up front, the advantages of the new aircraft's warranty may far
outweigh the purchase price. You can view a spreadsheet and create your
own scenarios by clicking: www.airplanenoise.com
5. Is my lease agreement properly written to
address both FAA and IRS issues?
Don't try to save pennies here! Go to a
specialist and have an agreement drawn up that will protect you and
your purchase. In the long run, you'll save!
www.advocatetax.com
6. Do I have a plan for flying my own aircraft?
Remember, the more your airplane flies, the more
money you make. And,the more money you're making, the less available
your aircraft is for you! Try to strike a balance, schedule well in
advance or set aside times to fly your airplane when the school is
closed or business is slower. Sunday became my "flying" day and the
airplane was scheduled out for me each week. Another benefit. . . I
felt compelled to fly when I had scheduled the airplane and was forced
to find new and exciting places to fly each week. Click on the link for
a few suggestions: www.airplanenoise.com/great_trips.htm
7. Is my aircraft properly insured?
Insurance will cost you more when your airplane
is leased so the airplane must fly enough to compensate for the added
expense. The insurance company has added risk when many different
people are flying an airplane and this risk is reflected in the
premium. Learn more by downloading the FREE TeleClass, "Navigating the
Aircraft Insurance Maze" by clicking the link below: www.airplanenoise.com/teleclass_schedule.htm
8. Do I have a realistic expectation for the
cleaning and maintaining of my aircraft?
The way the other airplanes on the flight line
look now is the way yours will look. Are you "O.K." with that? If not,
don't expect the flight school to change their behavior just because
you write something into the lease agreement. It just won't happen!
It's time to look for an alternative.
9. Do I have an exit strategy?
Getting out is as important as getting in!
Consider your exit now and make sure you can achieve your objectives in
that time frame. Is your plan to move up, add additional aircraft to
the flight line, earn enough revenue coming in to keep the aircraft
indefinitely? Map out your plan and set goals. Sounds like running a
business. .. doesn't it?
10. Do I really have what it takes to be in the
aircraft leasing business?
The biggie! Remember,this is a business and
should be treated as such. The successful leaseback business owners pay
their aircraft down quickly with the generated revenue and take their
profit at the time of sale. Those who spend the big summer checks find
themselves in trouble. Learn more about leasebacks at:
www.airplanenoise.com/answers_to_why.htm
About the Author
Pat Redmond, helps business owners who are tired
of long lines and baggage claims, fly their way to freedom! Enjoy
dinner with your family tonight! To learn more about the General
Aviation Business, sign up for more FREE tips like these, visit her
site at http://www.airplanenoise.com | 