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I was recently reading an article in “Thinking Bigger Business” that really struck a chord. The article “Good Time to Buy or Good Time to Sell?” asked the question of business brokers whether business buyers currently have an advantage or whether the power rests with sellers. One line in particular really made sense. It said, “If you have a good business, one that is growing profitably and in a good solid industry, you’re always going to be able to get top dollar in that industry.” To a certain degree, that same concept translates into aircraft ownership. If you have a desirable airplane model, keep it updated, avoid damage, and have not skimped on maintenance, you should be able to get top dollar for that airplane. Of course, everything is relative and if the market has dropped 30% you’re probably not going to recoup that loss. You should, however, be able to net a much better price for your asset than your peers who have not paid the same attention to their airplanes.If you’ll oblige, let me share with you several strategies I’ve seen that have worked best for the people we help. First, and you’ll recognize this if you’re a Stephen Covey fan, you’ve got to begin with the end in mind. If you’re going to buy an airplane, your first thought should be “how am I going to fare when it’s time to sell?” If you’re buying a model that has a terrible history of retaining any value then you shouldn’t be surprised that there’s still no marketable value when you get ready to sell. If you’re putting little to nothing down and have a debt to equity ratio nearing 1:1, you probably ought not be shocked when you find yourself upside down on your loan when its time to sell. Take an objective look at the plane you’re considering before making any commitment. Often, this involves asking a third party for their opinion. In any case, do your homework before you set your heart on a specific bird. Allowing emotions to enter the equation at this stage almost always means you’re going to lose more money than you should. Second, maintain your airplane properly and keep it updated. You don’t have to go overboard, but insisting that your 20 year old panel doesn’t need a facelift is delusional. Buyers want to see some upgraded avionics. Updated radios, fresh engine overhauls, and thorough annuals will do more to retain the value of your plane, and hence create more of a sellers market for your plane, than will new paint and interior. Most buyers prefer to spend money on things that will customize the plane for them rather than on things to bring the airplane up to date. Naturally, keeping your paint and interior in first rate – or new – condition will help the cause. Here’s a good example. My firm recently sold a Beech Bonanza for Don. Don’s airplane was nearly 20 years old and, on the surface, looked it. The paint and interior were original. They weren’t in bad condition by any stretch, but they weren’t great either. Don flew his plane regularly and made the decision to spend his money on things that mattered. For instance, he swapped out one of the old King radios with a Garmin 430W GPS, added an Aspen primary flight display, and upgraded his engine to one with higher horsepower (which, as a result, increased the weight carrying capacity of airplane too). Don’s maintenance program was routine and thorough and his logs were well organized and easy to read. Besides the outdated cosmetics, the plane was in top notch condition. If you’re one who tracks “book” values, this is an airplane that “booked out” at 2-3% less than the sales price. While that number may sound insignificant, most airplanes in his particular category sell for 5-7% below book value. In essence, Don got a 7-10% premium on his airplane.Let’s contrast this with another client we’ll call “Steve”. Steve had a similar, yet slightly newer aircraft that he bought new. During his 15 years of ownership, other than very good maintenance, he’d done nothing to keep the airplane up with the times. The radios were original and engine time was approaching the high range. His paint was still in very good condition, as was his interior (although it was cloth, not leather). Steve’s airplane ultimately sold for well below book value. Why? Because when the new buyer factored in the cost of needed upgrades, the price he was willing to pay was the highest amount that would keep him from owning an airplane that was worth far less than the amount he had invested in it. Finally, my last bit of advice to buyers is to not expect the plane to retain its value. Sure some airplanes will increase in value and some will hold their own, but for the most part planes are a depreciating asset. You are not buying a plane as an investment; you’re investing in a tool that provides other tangible and intangible benefits. The true cost of ownership should take those items into consideration too. So yes, while the popular position is that it’s a buyers market, good airplanes that have solid backgrounds and routine care should have a much better chance of netting top dollar than those that have been ignored by their current owners.
Chris Kirk is a Kansas City native and owns WildBlue, LLC, a Kansas City, MO based aircraft sales firm that sells quality owner-flown piston and light-jet aircraft world-wide. He is passionate about growing a vibrant general aviation community and believes in the possibilities it has to offer. Feel free to contact Chris at 816.479.2723 or via e-mail at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .
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