Plane Owner lease out benefits

Own & Lease Out Your Aircraft

Many aircraft owners use their personal plane for only about 50 to 100 hours a year. Such planes are valuable, but underutilized assets, about 95% of the hours in a working year.

Renting such a plane out for additional hours can bring its cost per flight hour down significantly, to where ownership can become more affordable, justifiable or even profitable.

  • Cost Reduction:  Example — When the parking costs for your plane are $2,000 per year, and it flies 50 hours a year, its parking costs are $40 per flight hour.  If you rented the plane out so it would fly 500 hours per year, its parking costs would be only $4 per flight hour. If you first have to buy plane insurance, rent a parking spot, pay for Weather Services and GPS Data Base subscriptions and a mandatory Annual Inspection, your first hour of flight time could be very expensive, however, for every additional flight hour, the cost per hour would decrease. Therefore, it can make good economic sense to rent out your plane for additional flight hours and thus defray its costs.
  • Sales Tax Avoidance: In California, owners who lease out their airplane 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.
  • 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:  SFC offers access to a platform, or a conduit, enabling you to lease out your plane by the hour. You can determine at what rate and for how many hours, or who and how many qualified pilots may use your airplane. Your plane will be flown only by pilots who meet the qualifications necessary for your plane. And, under policies and regulations, well thought out and detailed by the FAA.  Your plane can generate revenue. While it is flown only by select, conscientious renter pilots.

A Owner Plane Rental arrangement can be a 3-way win: 

  • You win with lower operating costs, more income & tax benefits, and owning an aircraft;
  • Stanford Flying Club wins by being able to arrange for better and more equipment availability for education and training; and
  • Students/Members win by having access to better aircraft and more aircraft availability.

Stanford Flying Club can help with the rental marketing of your aircraft, and assist you with a rental platform, rental customers, and information and services to keep your aircraft in great shape.  Through our connections with the industry, we can provide valuable assistance whether you already have or would like to obtain an aircraft, which you can lease or rent out.

 

For more information:

Please contact FlyStanford@me.com or ask for a Club Director at: 650-858-2200;

 

Please fill out the form below in order to download the Aircraft Cost Ownership:


Leasing F.A.Q.

A.

Choosing the right aircraft is a critical step that requires evaluation in several different areas.

  • Consider the “90% rule”. What type of equipment will meet 90% of my needs?  If you will only occasionally need a 5th seat, consider renting for the few times you’ll actually fly with 4 passengers. You will potentially save $100,000.00 – that is quite a few rental hours!
  • Are your trips primarily regional trips? A few knots of additional speed will go unnoticed while those same knots could be welcome on long cross-country trips. What will your average trip length look like?  Etc.
A.

Customers currently most often ask for Cessna 162, Cessna-172 and Cirrus aircraft, of the newer kind.

A.

Actually, SFC in the past did manage a mix of airplanes: some it owned and some it held for rent on behalf of others.

To Stanford Flying Club, availability of planes held for rent by others is more attractive than owned planes, as a means to be able to arrange for better and more equipment for education and training of its Members, without the need of having to tie up its modest operating capital or credit in a fleet.

Aircraft owners can generally provide lower cost aircraft, as they can save thousands of dollars from tax benefits, which SFC is unable to use or does not have.

A.

Yes.  However, SFC can only accept limited numbers and types of modern aircraft, as rental listings on the online platform.

A.

Both new planes and pre-owned planes can be good for rental purposes.
Newer aircraft have more student/renter appeal than old aircraft.  To finance the purchase of a new aircraft, the available interest rates are generally lower than for used aircraft, and you may see longer terms amortizations.
Newer planes have lower maintenance costs, and maintenance expenses will be lower due to warranty.

A.

Cost components include the Finance Costs, Maintenance & Repair, Electronic Services (XM Weather, GPS databases subscriptions), Insurance, Depreciation/Reserve, Parking, Property Taxes and some Administrative /Marketing Costs.   Our Aircraft Ownership page or the Club office can provide you with a Calculator that may help you determine expected average Costs/Hr.

A.

If you use a Aircraft Owner Lease Out / Cost Calculator, and slide or vary the number of hours/month flown, to where the net costs per hour end up being zero, you can see your estimated break-even point.  Depending on the rental rate set, this may typically fall somewhere between 30 and 60 flying hours a month.

A.

Yes and Yes. There are several IRS requirements that your aircraft rental business must meet if you want to use tax incentives.  However, regardless of the tax benefits you can still benefit from substantial cost reductions per hour when you rent your plane out.

A.

Work with your rental agent to set a rental price that is both competitive and covers the costs associated with your airplane, and includes a desired profit per hour.

A.

To offer planes via the SFC rental platform, planes must meet SFC / PUC insurance requirements.   SFC has a master policy for such purposes; however as the owner of your airplane you are responsible to pay for all of the expenses of the plane, including the insurance.

A.

For better technical support, factory-authorized maintenance facilities are preferred for maintenance.

Learn to fly

  • Call (650) 858-2200 to get started or schedule an introductory flying lesson.

    Or request a phone call