Help in deciding to do a leaseback

The first question we always ask is, "What does your insurance company
have to say about renting the aircraft?"
What are the minimum insurance requirements for a pilot to rent the
aircraft?
How large a pilot pool is there to support the aircraft?
What other comparable aircraft are available?
How does your proposed rental rate compare to comparable available
aircraft?
How does the the equipment in your aircraft compare to comparable
available aircraft?
In the club I am in, price, equipment and insurance requirements
determine how many hours a given aircraft is flown.
For example, in my club, we have a 1978 PA32-300 ($115/hr), 1978
PA32T-201RT ($113/hr), and a 1986 C182R ($105/hr).
These airplanes are flown predominantly by a core group of about 15-20
pilots in a club with about 250 members.
The 182 will finish the year with about 250 hours.

Rgrmstd <rgrmstd@cox.net> wrote in message news:<3fde3e67$0$198$75868355@news.frii.net>...
> I have talked to the
> school about getting involved in the leaseback program. They are
> encouraging that ...

You should understand that a leaseback arrangement is a win-only
situation for the lessee (i.e. the school). They pay the lessor only
for the time the school actually uses the plane (for which they're
collecting from someone else). They have no expense burden or risk of
loss, only the lessor does. Essentially, they collect from their
student and give the lessor a "cut" of the "take". For the school,
it's like having a free airplane. Naturally, they're going to
encourage it.

I'm not saying that's a bad thing. I'm not saying that because the
school can only win, the owner can only lose. But, only the owner of
a plane put on leaseback bears a substantial risk of loss.

The best tool to use for determining your potential for success (or
loss) entering into a leaseback situation is a leaseback spreadsheet.
Use a search engine to find a suitable one on the web. If you're an
AOPA member, use their aircraft cost of operating calculator to help
figure out some of the amounts. Generally, there's an identifyable
break-even point. If you can be assured that the plane will be rented
more than the break-even amount of hours, you're golden!

Rgrmstd <rgrmstd@cox.net> wrote in message news:<3fde3e67$0$198$75868355@news.frii.net>...
> Greetings fellow pilots. I have a situaton at hand and am weighing some
> options and thought that I have received good advice here before so I
> figured I would try again. Here is my dilema..I am currently enrolled in
> school to receive my commercial and CFI (as well as multi and CFII) I
> have a great opportunity to purchase an airplane. I have talked to the
> school about getting involved in the leaseback program. They are
> encouraging that, however the plane I am looking at is a 1980 Piper
> Dakota 236B. This plane has 235 horsepower. What I am wondering is if
> the plane would fly enough to offset some of the cost of purchasing it.
> I understand that it cannot be used for GA training. but I was wondering
> if there was a big enough market out there on a rental basis that the
> plane would fly enough to recoupe some financial outlay.
> I am interested in what ya'all might think. Thanks for your help and as
> always.....Happy Flying

Light GA planes have a difficult time making money on leasebacks. You
should do a dejanews.com search on the rec.aviation.* archives for
leasebacks. This subject has been discussed several times, and there
are a lot of good posts.

My take is: between insurance, depreciation, expected maintenance,
and unexpected maintenance, leasebacks are difficult to breakeven on,
let alone make money.

Also, I don't think a Dakota would do that well on the flightline.
Most pilots want something cheap to fly/train in like a
152/172/Cherokee 140.

Last, if you put YOUR plane on leaseback, YOU become a renter just
like everyone else. You can't leave your headsets, charts, personal
items in the plane. You have to schedule to fly. You don't know how
the plane was treated on the last flight, if the radios were acting
flakey, or if the engine made odd noises... Yet you still have all
the financial liabilities - in my opinion, the worst of both worlds.

One question for the legal types on the group. If you own a plane on
leaseback(incorporated or otherwise) and a renter crashes killing all
aboard, is there any way to shield against the upcoming lawsuits?
Would the plaintiffs have access to your personal assets? If so -
that alone would be reason enough for me to skip a leaseback.

BTW, is the school selling the Dakota, or are you buying it somewhere
else?

-Nathan