T

tdhanson

Well Known Member
I know everyone's situation is different. And I'm not looking for anyone to divulge sensitive information. The wife knows I want to build a kit plane or buy a plane (either kit or certified). Various options run from a Cessna 152 in the $20-25k range to a couple kit planes (Rans S6 or Kitfox) which would be in the $45-60k range completed, to a Vans RV7 or 10 or Glastar Sportsman that would end up being in the $100k + range completed. However, financial situation dictates we both ensure that this doesn't end up being the wrong decision. Right now I'm in a local club that has C152's and C172's so I can keep current. And I have a relative with a light sport single that I can occasionally use. But the 'bug' has bit and I want my own. I know building a kit would be a 3-5 year or even longer process. More likely to be 7-10 years. My wife has a relatively good professional job but I'm an independent contractor for the last couple years after my 18 years at a company ended. I've been finding work and currently on a contract that's fairly solid for another year. But thereafter ?
Other life situations is a house worth about $400k with about $80k left on mortgage. But we're anticipating spending $100k in kitchen and flooring remodel as well as exterior landscaping. Have about 8 to 12 months worth of my income as savings in ready cash/investments. I've done fairly well since march in the stock market with it. It would be a hard choice to use almost half to get into a plane.

One kid in local jr college and one started high school. We're both maxing out 401k allocations. Four cars (two paid, two about 1 year left).

So at what point can one comfortably balance income or use of savings to start building a kit or buy a plane. Any guidelines for the amount spend relative to one's financial situation.

One vendor has a %20 discount that ends very soon. It seems they have some sort of yearly discount but it varies each year. It would take about $20K to get part of the kit now followed by the remainder of $25k by 12/2010. That's $45k just for the kit.

My wife seems to think that people who own their own plane either are 'in the business' or are better off than we. I think it's those similar to us that have made the choice.

I'm feeling a bit selfish for wanting and wondering if I should wait or give up the dream at this time. But I'm 45 and not getting younger. I tell her we should both work towards things that we want and make us happy. BTW, she doesn't care for flying so its not 'her thing' I got her in a rental in Maui to fly around the island and whale watch. She enjoyed it yet was 'fingernails' in the dash at all times especially in light turbulence.
 
Everyone makes choices to afford their planes. Some forego buying new cars, others dump a spouse. In the end, it is up to you to figure out if you really want to build.

Don't go into this because you want a plane, you probably won't finish the build. Go into this because you want to build a plane that you want to own when you are finished.

While a vendor might be offering a 20% discount, be careful. Are you looking at this plane because you can afford it or because you want that plane? If it is the Kitfox (good plane) but you really want something to take long trips with, this is the wrong plane because it is slow.

There are lots of ways to save money on the build like buying a run out engine and overhauling it yourself with the help of a chapter A&P, buying pre-owned kits, keeping the panel simple, wood fixed pitch prop, simple cloth seats, etc. Besides, you can always upgrade later.

Build the plane you want to own. Simple as that. Get started and don't worry about the cost. Pay as you go and when you are finished, you are finished. Heck, I have a friend who spent over 10 years building his RV-6A quick build.

BTW, if you think building is expensive, wait until you are flying! Those monthly fuel bills can be a killer. ;)
 
Only you can decide your comfort level on expenditures for a hobby.

There are plenty of owner/builders here who are not independently wealthy and are building and/or flying at the expense of a new car, other hobbies, a bigger house, or a bigger savings account.

As a point of reference, I once owned a $55K (purchase price) Cessna 172. The all-up cost (loan payment, taxes, storage in a "shadeport", GPS subscriptions, and not insignificantly, maintenance) was about $900/month. Direct flying costs (fuel, oil, etc.) were on top of that. A cheaper plane (152, etc.) or an experimental would lower the costs of maintenance.

So, I would say that is about equivalent to cost of purchasing and owning a high-end luxury car.

At the time I was a lawyer with one paid-off economy car, a moderate mortgage, and was single with no children. There are folks here in much better and much worse financial situations.

If you can afford say, $1000/month then you can have that $100K RV in 8 or 9 years without incurring any debt. As you've noted, though, all of the popular kits require discrete, very large "chunks" of money at various points in the process.
 
This is certainly a tough one to answer since there are so many variables and everyone's situation is different. I can only tell you what I did...

With my wife's blessing (in fact, urging) I started putting aside money into the "airplane fund." In my case it was easy to figure out how much to carve out. I am a college professor and we just made my 9 month salary and typical summer pay my contribution to the family. Any extra work I picked up by consulting, extra teaching, grants for research, etc. went into the airplane fund. This gave me added motivation to seek the extra work.

I also created a spreadsheet that kept track of the airplane fund. Of course, at first it only showed income. But, I would use the spreadsheet to forecast several years into the future. I then started estimating the amount and timing of the various expenses. I figured it would probably take me 6-9 months to build the emp. Another year or more for the wings. And so forth... (BTW, all of my timing estimates ended up being very optimistic!) In the spreadsheet I estimated future income and expenses on a quarterly basis for 3 years or so into the future. Thus, I was able to keep a running calculation/forecast of the airplane fund balance. In my case, the income I was generating easily outpaced the expenses (I am a slow builder) so I was never slowed by finances; only time. The extra work slowed down the build. So, it all worked well. In my case I should have started sooner. However, other things were needing attention at the time. Also it is important to note that I was enjoying the building process. I have been OK with not getting to fly much. (This is starting to change!) So, this approach may not be ideal for someone who wants to be in the air quickly. However, I have never liked debt so rule #1 for me was to pay as I go.

With this method, I was able not feel guilty for "taking from the family" since my base salary was maintaining my normal contribution. Also, my wife isn't "equity sensitive" and doesn't feel that for every dollar that goes into the airplane fund, she gets a dollar to spend on something she wants. I'd be fine with that, personally. She just doesn't have any big wants. So, again, depending on your wife's equity sensitivity, your situation may be different. Like I said there are just SO many variables.

I can tell you, though, from a purely financial perspective it is very, very difficult to justify owning versus renting. Depending on various assumptions, I have calculated that you have to fly 15-20 hours per month before owning starts to be cheaper. Again, that is from a purely financial point of view. There are several qualitative factors that aren't in the numbers that can push you towards ownership. The point is, though, you probably won't be able to make a purely financial case to your wife (or yourself) for owning/building.

Like I said this is a tough one to answer... Good luck with your decision.
 
You sound like you have your fiscal house in order, which is a wonderful thing in these troubled (for many) times. Personally, I paid for my RV-6 project over a ~7 year period back when I was still single and had fewer responsibilities in life. It probably consumed 1/2 of my discretionary (after bills, taxes, retirement planning, etc) income. Whether using 1/2 of your discretionary income for a plane or plane project is a good idea is up to you...

For the first couple of years of my project I took a second job teaching night classes at a local college to fund the project. After that, pay at my daytime position increased to a point where I could quit the second job. In the end, I probably spent 10-15% of my gross income on my RV over the 7 year period.

One good thing about an RV project is that the money doesn't go down the tubes. If you do reasonably good work and don't fall into the trap of buying every neato tool or accessory you see on the internet, you can probably recover most or all of your investment if you are forced to sell due to a change in your financial situation.

Something you didn't clearly state in your post was the proposed mission for your airplane. The aircraft you listed covered a variety of missions, and I believe THE key to picking an airplane or airplane project is to have a good idea of what you want to do with the airplane and use that as a starting point for selecting the airplane you need.
 
You can afford it

tdhanson said:
But we're anticipating spending $100k in kitchen and flooring remodel as well as exterior landscaping.
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I think it boils down to how bad you want to do it. You obviously can afford it if you are going to spend 100k on the kitchen and floors. You can build an RV for a bit less.

I finished my B.S. this year after 24 years of trying to find the time. Sometimes things take longer than expected. I've owned several kits thinking I would finish in a short time. For me it's not going to go quick. I have 3 kids, a wife, a job as well as being an active USAF reservist. I was building an RV-6 at a substantial discount at one point, but there were so many problems with it I finally gave up and sold it.

I started my -7 in 2003. My youngest was 2 weeks old. It's now 2009/2010 and I am working on my wings (just starting the tanks). She turns 5 next month. When I pass by my plane (every morning when I go to work) I take pride in knowing that I built every piece. In my opinion, if you are building a plane you must do so because you want to. I will admit early on, it was questionable if I would finish. At this point I really have no doubt.

I guess my point is build if you want to build. If not buy a flying RV. They can be had at a decent price. You will save alot of time and headache if you buy.

If you decide to build and it is what you want to do you will take great pride in your creation. My buddy Bruce has been flying his for more than 3 years and according to him, he is still in awe of his creation (BTW he built his -9 in a one car garage).

As always YMMV.
 
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To me, the elephant in the "build an airplane" room isn't the insane amount of $$$ involved...it is the insane amount of time and dedication required. It will consume your life if you let it. Back when I was building, I found it difficult to not constantly dwell on what the next steps of the build were going to be...it was constantly on my mind. I found my mind drifting to the project while sitting in church...this is not healthy.

Now that I am flying my -8, I find that I miss the building process and all of the thought that goes into it...go figure...
 
When I started my -6A, I had no house, little savings or retirement, about $60k income, and a wife in med school. I planned on a long build (which was fine by me; I liked fiddling around with the project). Now I'm on my second project and expect to have it paid for in another three years. It's going much easier financially because our situation has improved but mostly because we now have a financial planner. When Judith finished residency, we had little more than her income (I went back to school because Flagstaff doesn't need MCSEs) and a lot of catching up to do. Our planner has helped us balance our short term goals (get a savings, get a house, my airplanes, we now drive late-model vehicles, and so on) with our long term goals (retirement, estate planning, etc.). He's been well worth it; we have savings, consumer debt paid off, student loans almost gone, mortgage on track, and long term on track. We've even been able to plan for an income reduction (Judith wants to do a fellowship) and I can still march forward on the -10. Yes, income helps but planning how to use that income is what's crucial.
 
If you want to "put your feet in the water" to determine your tolerance to financial pain, I would suggest an AA-1 both because they are cheap and indestructible, but also because they fly like an RV. You can buy one for under $20,000; leave it in a tie-down (cheaper than a hanger); can probably "afford" to insure only for liability; and then go fly and see how much use you make of it.

If you find you fly all the time and still have money to spare, THEN consider a more expensive airplane...

:D
 
I agree with breister's post above. Keep in mind that the financial situation nationally right now has a lot of people getting rid of their toys... It's an excellent time to buy a used RV.

4 cars? $100K on renovations? Money is the least of your worries. Ditch two cars, tell the boys to go buy their own. If you are considering building a plane, you've got to have the handyman skills to do your own kitchen. It'll take a bit longer than if you bring in a contractor and his crew, but it'll be 1/4 the cost. We were quoted anywhere from $40 to $60K to re-do the kitchen in our townhouse... I did it myself for $15K (and that's with high-end cabinets and fixtures, and including appliances), and learned a boatload about my house in the process.

You've just got to decide what's more important.
 
Oh, another thing. Most planes will hold their value, unlike a car, so when you sell, you'll get roughly your purchase price back. Maybe not adjusted for inflation, probably not your labor cost if you build, but you will get most or all of your capital cost back. Sort of like a savings plan.

Edit: You might look at buying a used RV. A friend bought a basic VFR 6A for around $50k, it will serve him well and when he sells he'll get his money back.

Can you avoid the cost of the remodel by trading work? You don't say what line of work you do, so maybe this wouldn't be practical.
 
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Snowflake said:
...If you are considering building a plane, you've got to have the handyman skills to do your own kitchen. It'll take a bit longer than if you bring in a contractor and his crew, but it'll be 1/4 the cost. We were quoted anywhere from $40 to $60K to re-do the kitchen in our townhouse... I did it myself for $15K (and that's with high-end cabinets and fixtures, and including appliances), and learned a boatload about my house in the process.
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This might be your angle... How about doing much of the work on the remodel yourself. The difference between $100K and what you spend on the remodel can be used to seed the airplane fund.

Remodeling is part of what I was referring to when I said I had other things to finish up before I started building. I remodeled our kitchen and bathroom for about $25K back in the early double naughts. This included tearing everything out of the kitchen down to the wall studs. I hired out a little electrical work and the flooring. Other than that I did it all. A contractor would have cost at least twice that (probably more). And, I thought it would be easier to fight with the remodeling job rather than a contractor. It came out real nice. Unfortunately, several years later, it ended up under 7 feet of water during Katrina!

When I was in the middle of the remodel and itching to get started on the airplane I remember reading a thread on a forum about "if you were building another airplane, what would you do differently?" One guy wrote that he would finish the kitchen remodelling project BEFORE he bought any airplane parts. Once the airplane arrived, the kitchen project slowed to a crawl. I took what he said to heart and redoubled my efforts to finish the kitchen. I told myself that working on the kitchen was the same as working on the airplane since each completed task moved me that much closer to ordering my first kit. I bought that line about half the time! :)
 
Don't build if you want to fly

Make sure you really want to build and your not building just to fly a cool plane. It takes a lot of time on a weekly basis to complete an airplane in a few years. If your still flying it takes time and $ away from the airplane project.

Brian
 
apatti said:
When I was in the middle of the remodel and itching to get started on the airplane I remember reading a thread on a forum about "if you were building another airplane, what would you do differently?" One guy wrote that he would finish the kitchen remodelling project BEFORE he bought any airplane parts. Once the airplane arrived, the kitchen project slowed to a crawl.
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Ha! I think that might have been me, a number of years ago, on one of the Matronics forums. I remember saying something like that. It's true, when I bought the tail kit, I had started the kitchen remodel. After that, I was back and forth between the kitchen and remodelling a basement room into a workshop, and then working on the plane. The kitchen timeline definitely suffered.

Mind you, I started renovating a bathroom this fall and then started looking at flying RV's to buy... There seems to be a pattern here. :)
 
Snowflake said:
Ha! I think that might have been me, a number of years ago, on one of the Matronics forums. I remember saying something like that. It's true, when I bought the tail kit, I had started the kitchen remodel. After that, I was back and forth between the kitchen and remodelling a basement room into a workshop, and then working on the plane. The kitchen timeline definitely suffered.

Mind you, I started renovating a bathroom this fall and then started looking at flying RV's to buy... There seems to be a pattern here. :)
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This is too funny! I'll bet it was you. Something about a basement being involved rings a bell. Well, I appreciate the advice. I am glad I don't have to divide my time. As far as repeating the pattern... At least I learned from your "mistake". :)

Happy New Year!
 
I can confirm that

Bdalporto said:
Make sure you really want to build and your not building just to fly a cool plane. It takes a lot of time on a weekly basis to complete an airplane in a few years. If your still flying it takes time and $ away from the airplane project.

Brian
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I agree with Brian. Over the last two years, I have earned a multiengine rating, a glider rating, and a towpilot endorsement. I've put more hours into my logbook than in any previous two-year period, but I got much less done on my RV than in any other two-year period since I started it. The good news is that nowadays others pay for most of my flying.

There are only so many hours in a day so you have to allocate them wisely.

Happy New Year!

Martin
 
$100k into a kitchen that will go in a house with $80k owed on it?

I know that kitchens sell the house....but look at the savings in interest if you pay off that $80k, save for a bit, and then either forgo the kitchen and build the plane......or do the kitchen and save for the plane, eitherway, i'd avoid a HELOC to finance a plane
 
Resale

One of the big reasons I started an RV was that I knew I could sell the unfinished parts for a good percentage of what I paid for them if I couldn't finish it. I don't think you can do that with any another homebuilt. We have a member of our EAA chapter who is having trouble giving away an Ultimate 10-200 project.
 
I would cook in the yard before I would spend 100K on a kitchen. Seriously, I would pay off all debt before building an airplane. I have no idea what's ahead, inflation, deflation, depression, who knows, but I don't want to carry debt into it.
 
I would pay off the house......... then get a loan for 30K and go look for a $50k 6A and have fun now! Tinker with the 6 to get it the way you want. And that will come to you after you fly it for a while.
 
gasman said:
I would pay off the house......... then get a loan for 30K and go look for a $50k 6A and have fun now! Tinker with the 6 to get it the way you want. And that will come to you after you fly it for a while.
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what's the logic behind paying off a house and then acquiring a loan? do you really think there is a difference?
 
One conservative opinion

Every situation is different, but Dave Ramsey the anti-debt money guru, with whom I tend to agree, advises that:

1. Toys should always be bought with cash, never debt,

2. Only after all other debt is paid off and and retirement and college accounts are being funded as per plan, and

3. then should not total more than 1/2 of your annual income.

Most people aren't that conservative but it does define one end of the range of reasonable (with the exteme being pure obessive mislerlyness).

I don't think that there is strong money case for building over buying a 40 year old 152 or PA28. They are cheap enough that you could park it outside and not fully insure it for example. I would certainly insure and hanger a newly built RV babe.

Of course all of life is a series of trade-offs. I fund my flying in part by driving the same old beater truck year after year.
 
I started my tail 8 years ago and I could just barely afford it. At the time it was just me and my wife making 34K household. You never know where life will take you... in the last 7 years we've had 3 kids.... added 3 college degrees... I jumped from the enlisted ranks becomming a pilot for the Air Force ....and my wife became a nurse practitioner. Our salaries have gone up a tad. We use our baseline salaries for everyday life and use any extra money I get on deployments for the -7. For me, it would never be a financially good time to build an airplane....it's all about how bad you want it. I drive a hand me down vehicle and make DIY improvements to the same house we lived in years ago. Yeah, and you don't have to spend $100K to build a nice airplane. Sheesh...
 
Everything...

"The happiest people don't have the best of everything, they just make the best of everything they have."

John Clark ATP, CFI
FAA FAAST Team Member
EAA Flight Advisor
RV8 N18U "Sunshine"
KSBA
 
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