Yeah, imagine if only 1 person was flying it instead of 3 and if money was put away for the overhaul… you’d have made some $$ on the sale and you’d have a small pile of overhaul $$ sitting there with no more overhaul on the horizon.
Let me clarify this a bit… If the cost of the overhaul doesn’t seem like such a big problem, then it’s not a big deal either way.
Many people can swing the overhaul cost within their yearly budget and for people in that situation, putting away money on a per hour basis doesn’t matter as much.
For me, Im always thinking of putting the money on an hourly basis into an S&P 500 index fund earmarked for overhaul. That way I can profit and be excited when I need an overhaul! 
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Not quite sure what you mean by cash flow. I could swing 15% down for 150K$ plane. What I would expect to pay monthly including saving for maintenance for a plane of that price. I saw a breakdown of a 150 bought for 60k that cost the guy 1k a month on average.
That probably gives you a much better ROI than a savings account. I like that idea.
Basically, can you afford the monthly payment if the flight school you may lease back to isn’t generating much money for you
I suppose I need to do that math. That would be the airplane cost, sales, property and use tax, registration, insurance, hangar, fuel, and saving for maintenance like approximate overhaul price, inspections, and in case of emergency funds, correct? Let me know if I am missing anything.
I like to divide the costs into two categories.
What does it cost me if I don’t fly at all:
- Hangar
- Insurance
- Annual Inspection
- Registration
- etc.
What does it cost me on top of that per hour to then go fly it:
- Fuel
- Oil
- General Maintenance Reserve
- Overhaul Reserve
- etc.
@LeeGriffing likes to then divide my “Don’t fly” budget by the amount of hours flown that year and add the result to the “per/hour” amount… I don’t really care about that, but if you are leasing back to a school (or running a 135) then that would make sense to do. (which is Lee’s background, so I try to extend him some grace on this idiosyncrasy that drives me insane)
I have it broken down several ways. I call them fixed costs and variable costs. Which are Rob’s Don’t fly and Fly costs respectively. I have fixed costs by per month and per hour and I have variable costs with and without fuel and I have fixed and variable costs(total costs) with and without fuel. @RobertBerger is right, my background is such that it only makes sense to divide the fixed costs per hour or else when someone asked what it will cost per hour I will give them only variable costs which would be a lie.
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