Owning a Helicopter

[zcat]

I would eventually like to own a helicopter--probably an R44--and work for myself. I know there are a few options:

1. Leaseback
   
2. Fractional ownership
   
3. Fork over all the cash
   

Unless I hit the lottery, the last one probably won't be an option. I could probably swing either of the others in a few years. Has anyone done leaseback or fractional? If so, how did you start, and how has it worked out? How sustainable is an income with an R44 (certainly, part of the answer lies in where one is located). I don't necessarily want to start a school, but I'd like to figure out a way to make a living owning my own a/c. Any input is greatly appreciated.

 

z

[jehh]

A leaseback isn't going to make you a living, if it did, the flight school would own the aircraft.

 

The main purpose of a leaseback is to offset some or all of the costs of owning a helicopter, while allowing you to fly your own helicopter for a reasonable cost.

 

A fractional ownership is really a partnership by another name, often with one company or person assigned the duties of aircraft management.

 

If you want to make a living with your own aircraft, you need to develop a business around it, the customers, marketing, etc. Who are you targeting, what will you do with it, etc.

 

An R-44 can pay for itself, the cost to operate it is reasonable enough, but to actually make money, you need a steady source of income larger than the steady source of expenses.

 

Having owned aircraft, I can tell you the costs are higher than most people expect, and will take you by surprise if you don't have some help getting into it.

 

More questions, ask away...

[Guest 13snoopy]

I would eventually like to own a helicopter--probably an R44--and work for myself. I know there are a few options:

1. Leaseback
   
2. Fractional ownership
   
3. Fork over all the cash
   

Unless I hit the lottery, the last one probably won't be an option. I could probably swing either of the others in a few years. Has anyone done leaseback or fractional? If so, how did you start, and how has it worked out? How sustainable is an income with an R44 (certainly, part of the answer lies in where one is located). I don't necessarily want to start a school, but I'd like to figure out a way to make a living owning my own a/c. Any input is greatly appreciated.

 

z

Cherry drying, tour flights, carnivals/fairs, maybe flight training, powerline surveys, mining exploration, etc.

The R44 is excellent for all the above. Very efficient helicopter to own/operate.

PS

You don't have to start off with a new one, you know.

[zcat]

13snoopy--thanks for the ideas. Those are all things that sound doable. Good point on new vs. used a/c.

 

 

jehh--I appreciate your perspective, thanks for your input.

Who are you targeting, what will you do with it, etc.

These are the questions I'm looking for ideas on. It's going to be a while before I'm ready to jump into this. I'll have plenty of time to come up with a formal business plan, etc. If you don't mind, I might PM you, because at some point I'd like to talk with you in more detail. I'd rather talk to one guy who's done what I want to do than 100 who are good at pontificating about it.

 

Thanks again to both of you.

z

[jehh]

jehh--I appreciate your perspective, thanks for your input. These are the questions I'm looking for ideas on. It's going to be a while before I'm ready to jump into this. I'll have plenty of time to come up with a formal business plan, etc. If you don't mind, I might PM you, because at some point I'd like to talk with you in more detail. I'd rather talk to one guy who's done what I want to do than 100 who are good at pontificating about it.

 

Thanks again to both of you.

z

 

You're welcome... when you get more serious about it, drop me a message and we can talk further.

[ReneH]

I would eventually like to own a helicopter--probably an R44--and work for myself. I know there are a few options:

1. Leaseback
   
2. Fractional ownership
   
3. Fork over all the cash
   

Unless I hit the lottery, the last one probably won't be an option. I could probably swing either of the others in a few years. Has anyone done leaseback or fractional? If so, how did you start, and how has it worked out? How sustainable is an income with an R44 (certainly, part of the answer lies in where one is located). I don't necessarily want to start a school, but I'd like to figure out a way to make a living owning my own a/c. Any input is greatly appreciated.

 

z

Hi Z

 

Where are you located? I have a 44 in Maine, doing what you are planning. Just starting to get into the tourism, photo, fair stuff. It is more expensive than you will plan for, and the revenue stream is uncertain. I would like to share ownership somehow to cut the outflow and maybe increase the work potential. I'm open to suggestions... Keep in touch...

 

Rene

[Gerhardt]

I had a partnership on an airplane for several years and it worked great. Each partner paid a fixed monthly fee plus a small fee per flight hour into a fund that was used to cover hangar, insurance and maintenance. Each month a different partner was the primary pilot - anyone could fly it at any time, but in the event two people wanted it at the same time it went to the primary pilot of the month (or the first one to call dibs). Never had a problem.

 

I would love to find a partner in either an R22 or an R44 and am in mid-missouri, in case anyone here is interested.

[zcat]

Rene,

Too bad I'm in Idaho--sounds like that would be a sweet deal. I'd love to talk with you at length if you'd be open to that. I'll shoot you a PM sometime.

 

 

Gerhardt,

That sounds like a great deal for a non-business situation--which I'm open to, if I can't make the business side of things work. I work with a couple of guys that own fixed-wing and lease back to a flying club they're members of. I may approach the club and see if they'd be willing to take on an R44.

 

Thanks for the great input.

 

z

[Guest pokey]

I would eventually like to own a helicopter--probably an R44--and work for myself.

z

 

I've owned mine (269B) for over 15 years, & many of my friends also own 300's. The ones that try to make $$ w/ the ship? -- its a constant up-hill battle between maintenance/insurance & getting the "right good paying" jobs.

 

I use mine just for fun, (did a few photo flites years ago, but refuse photographers nowadays). ( i will admit, you can pick up just about any chick in the bar by inviting them for a helicopter ride on the weekends) (( i NEVER did that tho)) One friend of mine does strictly photography work, but? he has another business ( not aviation related) to keep his helicopter flying. Another friend is millionaire & just uses his for fun ( he also has about 8 airplanes that are "toys" too) [must be nice HUH?] The one friend that is an instructer (guy who is the full on auto pilot in my website video) He beats his head against wall ALL the time whining about insurance & maintenance, & losing jobs for various reasons.

 

All in all, i would strongly suggest you get A&P/IA ratings, maintain the ship yourself, & DON'T quit your day job

[Collective Down!]

Do you wanna know how to make a small fortune in aviation?... You start it with a large one!

 

I've owned 3 airplanes that were "leased back" to a flight school, and now I own an R22 that I manage myself for my own separate flight school. The proper term is "managed" (it makes a difference to the IRS, and it's different in the fact that the owner is responsible for all expenses related to the aircraft). Management also works out better for the company using the aircraft because it eliminates all the fixed costs related to operating the aircraft. ie more risk for you, less for them.

 

There are a couple things that I wish I knew about aircraft management, and subsequently found out the hard way...

 

1. It's very difficult to watch someone else fly your aircraft, bouncing down the runway (in the case of an airplane). It takes every ounce of strength to keep from strangling a renter sometimes. I just don't think I could sleep at night if I leased a helicopter... An airplane will take all the abuse you can dish out, but not a fragile whirly bird.

 

2. An aircraft management is a money losing proposition. It seems great when the aircraft is under warranty and you get a huge check every month, but that comes to a quick halt when the warranty ends and stuff starts breaking more often. The catch is, that if you own the aircraft with a business entity (such as an LLC, which is essential) you will be able to deduct the expenses and depretiation of the aircraft. HOWEVER.... As a business entity that isn't in this game just as a hobby, the IRS will only let you lose money for three consecutive years before you get audited (been there, done that). You're allowed to lose money after that, and by all means you will, but you can't deduct any more than you made from the business. In other words, you'll lose more and more money every year, but won't be able to recapture that loss in the form of a tax deduction.

 

3. If you already have a private aircraft and came to this brilliant idea to "lease" it to a school for what would obviously be commercial operations, your insurance rates will do nothing short of skyrocket. In my case, I owned a 1999 172R that costs less than 1,000 per year for hull and liability for private use. Multiply that by ten for use at a flight school. There is a slight exception to this with a helicopter since even the private insurance is already expensive, the commercial doesn't cost a whole lot more.

 

4. This one I never even thought was possible... I had a Cessna 414A RAM VII (A multi-engine piston, pressurized, turbocharged, 8 seats... the works). I leased it to a company to use it for charter. Insurance not only shot through the roof, but I no longer qualified to fly it by myself for private use, despite the fact that I had more time in type than the pilot they hired to fly it and I gave him the transition training in it.

 

5. If you still want to go through with it... Get a Robinson. I thought about a Schweitzer, Enstrom, even one of those 250K Bell 206s that you see in Trade-a-Plane... But in the end, the maintenance schedule and reliability kept me coming back to the Robby. I've had it for 150 hours now, and only one big problem. Sprag clutch dripped... 250 bucks, parts and labor, not too bad.

 

Before you even THINK about buying the helicopter or even doing a prebuy inspection, call an insurance company and run some numbers by them. When I bought the R22 I had an ATP Airplane, a bunch of CFI ratings, no accidents or insurance claims, a 4-year aviation degree, first class medical, no driving record, enrolled in a random drug program for work, employed as a flight instructor and charter pilot, my helicopter instructor was an auditor for my insurance broker... But none of that meant anything because I didn't have enough rotorcraft time (they wanted 300 helicopter) and they had a problem with my age (23). In the end, I got them to cave, but it was not easy.

 

My final advice... Split a helicopter between yourself and 1 to 3 other individuals to dampen the fixed operating costs. More specifically, don't split the helicopter, but split the limited liability company that owns the aircraft so it's a little more fluid to enter and leave the agreement. An LLC should reduce your exposure to most of the risk, but if your negligence causes trouble, you will still take the heat.

 

I set up my LLC with www.bizfilings.com but don't think that you can set this up without talking to a lawyer. An aviation attorney that knows what they're talking about can set you back 1000 bucks an hour.... I'm in the wrong business.

 

Hope this helps. PM me if you still have questions.