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June 5, 2019 by admin

Do you own an plane? Have you ever considered renting it? Renting your plane is a good way to offset your cost of ownership. The fact is, personally owned aircraft are the most under-used assets around. Most owner flown aircraft get less than 100 hours per year of flight time, which means they are sitting on the ground most of time. Aircraft need to be flown routinely and as you are probably aware and aircraft sitting too much is not a good thing.

Most privately owned aircraft are flown by their owner less than 100 hours per year. These planes are valuable, but underutilized assets, and they could be earning revenue rather than sitting in the hangar. 

Currently, there are not many good options for owners when it comes to renting their plane…co-ownership or a leaseback arraignment is about it. Each of these come with their own challenges. For example, with co-ownership you might have issues like scheduling conflicts, maintenance disagreements, and financial disputes. And complications can arise when someone wants to sell their share of the aircraft.

In a leaseback agreement, owners essentially turn over full control of their aircraft and find themselves having to schedule time like everyone else; they no longer enjoy the freedom that is such a big part of private aviation. Add to that, with a leaseback, owners typically get less than half the rental rate being charged, so owners don’t see the income they’re expecting. The loss of control is the same way with maintenance – except when it comes to footing the bills, which can run high due to the additional wear and tear on the aircraft in a rental fleet.

Renting your plane will bring your cost per flight hour down significantly and make the cost of owning more affordable, justifiable or even profitable.

By renting your plane, you win with lower operating costs, more income and tax benefits.

  • Cost Reduction:  Example — Lets say your annual hangar fee is $5400 ($450 per month) and you fly your plane 100 hours per year. Your hangar cost is $54 per flight hour. If you rented your plane for just 100 hours per year at $135 per hour you would more than cover your hangar cost. You could offset your cost of insurance, maintenance, and inspections by renting your aircraft out for a few hundred hours per year. Therefore, it can make good economic sense for you to rent your plane and defray its costs.
  • Sales Tax Avoidance: In many states, owners who rent their aircraft may instead of paying a sales tax at the time of purchase, elect to have renters pay a use tax, saving the owner thousands of dollars. Your tax adviser can help you plan your best tax strategy.
  • Income Tax Benefits:  When you are in the ‘business of renting’ out an airplane, you may deduct an annual “tax depreciation”, much larger than your plane’s actual market value depreciation. Additionally, you can deduct your plane’s operating expenses (such as maintenance, insurance, parking, admin services), as well as the interest of any loans to purchase and own the plane.
  • Rental Revenue:  Rent-A-Plane provides you with this platform to rent your plane by the hour. We do not charge a listing fee! We charge a 15% service fee for each aircraft booking. You determine your rental rate, rental frequency, and pilot qualifications required. If you are a CFI you can earn additional revenue by providing flight training or discovery flights following policies and regulations outlined by the FAA.

We are developing a new way for owners to rent their aircraft while remaining in full control of the details. The owner may only want to rent their aircraft occasionally to help offset some of their operating cost while not run up a bunch of hours like you would see in a leaseback. Furthermore, the owner is the aircraft contact and approves each rental based on their own requirements. It’s a great way for owners to generate money and reduce the cost of aircraft ownership. It only takes about ten minutes to list your plane and it’s free!

 

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