VAF Forums

VAF Forums (https://vansairforce.net/community/index.php)
-   RV General Discussion/News (https://vansairforce.net/community/forumdisplay.php?f=2)
-   -   Do builders that sell profit or lose? (https://vansairforce.net/community/showthread.php?t=190888)

sleeper-319 01-07-2021 03:08 PM

Do builders that sell profit or lose?
 
Just a curiosity here... but do builders that build and sell Vans aircraft profit or lose money on average? I get the sense that typical sales prices for used aircraft (even low time aircraft) are often not much more than the cost of kits and components, meaning owner/builders don't get compensated for their labor. But then there are some folks who build lots of experimentals. Do the people who build multiple aircraft make money on the sale?

I'm pretty new here, and I did search, so apologies if this is a well worn topic that I just missed.

Electrogunner 01-07-2021 03:14 PM

I think most get their money back out, but not time invested. Maybe if you paid yourself $2/hr you could make a profit.

BobTurner 01-07-2021 03:28 PM

My opinions only:
First, remember that building an EAB if your sole intent is to sell and make money, is a violation of the FARs. But ‘intent’ is tough to prove.
Second, there are a few who do just that. (A) by the time you’re building your 4th or 5th airplane of the same type (say, RV-10), the amount of time needed goes down drastically. You’ve gotten good at it, you know all the choices to be made; (B) If you are very good, there is a market for Oshkosh award winning planes. There are buyers who will pay a large premium for perfect looks.

sleeper-319 01-07-2021 03:33 PM

Quote:

Originally Posted by BobTurner (Post 1492204)
My opinions only:
First, remember that building an EAB if your sole intent is to sell and make money, is a violation of the FARs. But ‘intent’ is tough to prove.

Yeah, understood. I think "get compensated for" was a poor choice of words on my part. I really meant do they recover costs of building, and your comments make sense. Like all walks of life I suppose, reputation for excellence and credentials like a show winner will command a premium.

Ironflight 01-07-2021 03:45 PM

The real answer is that it depends on the market (at the time) and the model of RV, but in general, you’d have to be very lucky to make money if you want to earn anything more than a couple of bucks an hour for your time. And as Bob says, you can’t legally build with the intent to sell and make money.

There are times when the market is glutted with RV’s, in which case you might just get cost of materials out of a sale, and at other times (right now, for an RV-10 or -14) it is a seller’s market and the airplanes are going for pretty high dollar.

On the average, I tell people that they should not expect to get more than the price of the kit and accessories out of their airplane - if they do, consider it a nice surprise!

Paul

MLock 01-07-2021 03:53 PM

I have built and sold four RVs (so far). An RV-3,6,7, and 8. I lost money on the RV-3. Hard to sell a single seater almost thirty years ago as the RV-6 was the hot ticket back then and RV buyers wanted the SBS two-place.

I made money on the 6, 7, and 8 but only within the context of the amount for which they sold was greater than the cost of parts, paint, and taxes. Forget getting paid for labor. Actually, if you consider the effort required to build an RV labor, then you are doing it for the wrong reason.

Without having kept actual records, I would suspect that after considering the operational and fixed costs associated with owning an aircraft, I think it was pretty much a push situation. How many expensive hobbies have the potential to actually pay for themselves?

I believe it was Ken Scott who said that "Flying an RV was turning dollars into fun". It's nice that after the fun, the dollars just might come back.

Plummit 01-07-2021 05:05 PM

Are you kidding me??? All of the joy and shear fun of building coupled with the ego boost from flying your own plane...Priceless! :D

-Marc

Ralph Inkster 01-07-2021 05:05 PM

Quote:

Originally Posted by MLock (Post 1492215)

I believe it was Ken Scott who said that "Flying an RV was turning dollars into fun". It's nice that after the fun, the dollars just might come back.

I think every seller eventually feels that they loose - loose the pride of showing off their accomplishment, loose the joy of flying their great handling RV, & the prospect of settling for something more boring & mundane.

Captain Avgas 01-07-2021 05:47 PM

Quote:

Originally Posted by sleeper-319 (Post 1492198)
Just a curiosity here... but do builders that build and sell Vans aircraft profit or lose money on average? I get the sense that typical sales prices for used aircraft (even low time aircraft) are often not much more than the cost of kits and components, meaning owner/builders don't get compensated for their labor. But then there are some folks who build lots of experimentals. Do the people who build multiple aircraft make money on the sale?

I'm pretty new here, and I did search, so apologies if this is a well worn topic that I just missed.

How much money you get back on an RV build will depend on many factors including the state of the market at the time. But the 2 biggest factors in my opinion are:

1. The quality of the build. It doesn’t cost any more money to build a really well crafted RV than to build a real dog. Everyone starts off with the same kits from Vans....but the finished products vary wildly. I always tell new builders to protect their financial investment by building to the very best of their abilities and not trying to complete the project in record time. Impatience is the enemy of build quality.

2. Whether the aircraft has a C of A. If you sell an incomplete project expect to lose a bundle of money....you’ll be selling to bargain hunters and you will not get back the price of the parts. Everyone who starts an RV build thinks they’re going to finish the aircraft....but the majority who start at the empennage do not finish and lose considerable money. Sadly, the more they build the more they lose....selling a 90% completed project will produce the biggest loss.

Mel 01-07-2021 05:53 PM

It depends on many factors. The best way to profit is to build, fly for years, then sell. Example: I finished my RV-6 in 1993, when kit prices were much lower, and flew it for over 25 years. When I sold it, I got more than twice what I had in it, plus 25 years of fun.


All times are GMT -6. The time now is 09:12 PM.