 |
Aircraft Appreciation |  |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
 |
by
Paul Bertorelli
Editor, The Aviation Consumer
Mistakes Were Made
Through unforeseen circumstances, many an owner has taken a quick and painful bath on an aircraft purchase. You find the airplane you want, do a thorough pre-buy and 100 hours later what appeared to be a perfectly sound engine tosses a cylinder out the side of the cowling. It happens. The risk is unavoidable.
But many owners douse themselves by over investing in modest airframes and/or fixing up a tattered pig and handing the keys to a buyer at a fire sale price a year or two later.
Let’s take another example, the 1979 Seneca in our Dirty Dozen. As twins go, the Seneca is an average appreciator but doesn’t hold a candle to the hottest singles. Even so, buy wisely and you can come out of it a little better than even.
But if you buy wrong or fix up and sell short term, you can easily turn pennies of honest-to-goodness black ink into many dollars of red.
Consider the owner who bought a 1979 Seneca three years ago, with low time engines and old avionics. Who can blame him for wanting to replace those radios and maybe add a panel-mount GPS? Might as well spring for a new paint job to keep pace with the panel.
Three years ago, the owner bought the Seneca for about $95,000. The improvements add up to $21,000, $14,000 for the avionics and $7000 for the paint. That means the owner has $116,000 invested. If the owner gets the bug to sell after the refurb, he might get lucky and get $110,000 for a net loss of 5 or 6 percent.
The bath gets seriously wet if an engine lunches or the twin turns out to be a hangar queen, spooking the owner into selling after dumping several thousand into the airplane to "get it right."
For an owner or a seller, the lesson is simple: If you plan short term ownership— say less that three or four years—keep the improvements cheap and skin deep or do none at all. Paint refurb or an inexpensive interior is a good idea, a pair of new KX-155s and an autopilot are not.
|
"You don’t build a $200,000 house in a $100,000 neighborhood," says Bill Hemmel, of Aeroprice.com, the leading online and software-based aircraft evaluation service. "It’s the same with avionics. If you put a new KX-155 in a Warrior, you now own a used KX-155." The economics are brutal. According to Aeroprice software, if you add a KX-155 to a 1978 Warrior, the hull value increases by $2000 if the box is brand spanking new. But the avionics invoice will probably total $3500. That’s hardly a good tradeoff. A new WX-900 Stormscope might add $2700 to the selling price but cost twice that to install. This equation favors the patient buyer. If you find an airplane that’s equipped nearly as you want it with a low time engine and with nearly new paint and interior, you’ll probably pay a premium price. But you’ll get the new stuff at half what it would cost to install
new, courtesy |
