PILOT SPIN
Spin Zone => Spin Zone => Topic started by: Becky (My pronouns are Assigned/By/God) on June 13, 2022, 07:04:57 AM
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Crap. My husband keeps the plane in a very nice T-hangar (in a building of 10 T-hangars) that he leases from a friend who owns several hangar buildings.
Now our friend is getting out of the biz, and is selling the hangars individually, and there would be some sort of LLC group to manage the upkeep and such of all 10 hangars.
So my husband wants to buy his hangar. They’re scarce around here, with long waiting lists. But $63,000? In economic times like these? He’s always maintained that a cash position is best, so we have the cash, but I’m having trouble seeing a luxury hobby piece of real estate being worth much if things go steeply south, which I do think any thinking person cannot deny is looking likely.
Unless we have to hide out in it or live in it. :)
What do you think?
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$63k for a t hangar is not bad. But I assume the ground under it is owned by the airport?
And how long is that lease good for?
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It all depends on where you are. $60k will get a very nice 60x50 box hangar here, and $10k will get you one of several 40x30 available box hangars. Nothing fancy, but good shelter from Wisconsin snow. While there is long waiting list where you are, it may be for renting vs buying. That list may evaporate when it comes to shelling out 60k. My advice would be to not be a first mover. See if there are buyers for the other hangars in the block. Or buy two and rent out the other one? Other than that, I have no idea. I do wish you the best in this adventure.
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If you plan to continue owning the plane indefinitely then I would lean to going ahead and buying it, as long as you know all the obligations such as property tax etc. We owned a hangar that was on county property and if I recall there was a nominal rent for the land (I think it was $30 a month) and a low property tax. We were glad we had bought it but then we only paid $12,000 but that was back in the 90s. Sold it later for $18,000.
Yes we are heading for major economic downfall and there is a risk you could end up selling it at a loss later, but on the other hand the more the value of the dollar drops the more sense it makes to put dollars in some tangible asset. The hangar might hold more value than your $63,000 cash over the next few years.
On the other hand if the depression hits GA real hard, and young uns aren’t getting into it, the hangar shortage we see now potentially could reverse into an oversupply and drive down the value but I’m hoping we are a ways off for that happening.
Also do a calculation of what you’re paying in rent and how long will that be made up if you buy the hangar.
And yes maybe wait and see if someone else buys one like username says and at what price! He might be asking too much. You could always haggle I suppose.
Or just let hubby do it and then when you go bankrupt you can rag on him about it. ;D
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My husband ... leases from a friend,
So my husband wants to buy his hangar.
He’s always maintained that a cash position is best,
What do you think?
That's a good mindset, but it's also not a good mindset.
A lease is basically a loan without equity.
Cash flow is what's important. Can you get terms that are equal or better than the lease? If inflation goes sky high, you'll be paying off a loan with cheaper dollars, whereas the lease will surely increase. If the economy completely craps out, you're hosed either way.
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Oh my gosh, I hadn’t thought of all those things. Thanks! Yes, the airport (county port district) owns the land. I hate decisions that involve trying to predict what all could happen.
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Oh my gosh, I hadn’t thought of all those things. Thanks! Yes, the airport (county port district) owns the land. I hate decisions that involve trying to predict what all could happen.
Better check to see the lease of the land. Most are twenty year leases with provisions for extensions (5 years at a time). Once the lease is up, they (municipality) gets the building.
Also shifty local governments, if they realize your building could produce income, they can get creative and end the lease, and you are left with nada.
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Better check to see the lease of the land. Most are twenty year leases with provisions for extensions (5 years at a time). Once the lease is up, they (municipality) gets the building.
Also shifty local governments, if they realize your building could produce income, they can get creative and end the lease, and you are left with nada.
In some cases, before entering the transaction, you can renegotiate the land lease with the government, so you can start out with a fresh 20-year term plus extensions.
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Down payment changing hands today. The whole building of hangars will be under an LLC. We will “own” a hangar I guess. I shared all your comments with him and now I’ll trust that he knows what he is doing.
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Down payment changing hands today. The whole building of hangars will be under an LLC. We will “own” a hangar I guess. I shared all your comments with him and now I’ll trust that he knows what he is doing.
Good luck!