Ahh...the old "rent vs buy" debate. Many experts have weighed in on how to decide between renting or buying anything. Renting or buying a house, a boat, or even tools...it doesn't usually make a difference, the advice is usually the same.
It's not always so cut and dry.
The rent or buy decision could be solved by just doing some simple math. If you will spend less renting something rather than buying, then renting might be the right choice.
We happen to be spending our winter skiing in Durango, Colorado (beautiful!), so I'll use skiing as an example.
Let's say it costs an average of $250 to rent some basic ski gear for the season. If I plan on skiing for the next 4 seasons, I could plan on spending at least $1,250 in rentals over a 5 year period. On the other hand, if I can purchase halfway decent ski equipment for $1,000 that would last longer than 5 years, it is actually cheaper in the long run.
It's not always simple math though. What about significant purchases such as a home or airplane?
Let's look at a vacation home real quick. Even if you own vacation property without a mortgage, you are most likely still paying property taxes and insurance.
There is still a math equation here. If you only go to your vacation home once or twice a year, would renting a place in the same location cost you less? When you're renting, you don't have to worry about paying for things like taxes or maintenance; however, you lose the freedom of vacationing whenever you want.
When it comes to renting vs buying an airplane, you should also consider the financial trade-offs as well as the "lifestyle costs."
From a purely financial perspective, it rarely makes sense to own your own airplane instead of renting. The cost of airplane ownership can be quite extensive. Not only is fuel expensive, you have to budget for on-going maintenance costs, inspections, registration, storage costs, and insurance...just to name a few.
The more hours you log in the cockpit, the more you are justifying the airplane ownership, but it will still be costly.
Now for some pilots, taking pride in owning their own airplane and having the freedom to take it out whenever they want is worth those extra costs. These are the "lifestyle costs" I mentioned earlier.
I've often thought about how fun it would be to fly out to see a friend and spend a long weekend in town. I'd be hard pressed to find an FBO willing to lend me a plane for 3 or 4 days while only logging a few hours of flight time.
If you own your own airplane, you don't have to worry about restrictions like that. You can decide you want to fly out to see your friend in Minnesota, and be in the air the same afternoon. It's up to you to decide if the extra costs to own your airplane are worth it.
Another benefit to ownership is that you know exactly how that aircraft is flown and how often maintenance is performed. When you rent, you give up some of that control although you would hope most FBOs take decent care of their equipment.
What if you don't want the extra costs of airplane ownership, but want a tad extra bit of freedom to fly when you want?
Some pilots join flying clubs to enjoy a hybrid of renting and buying their own airplane.
There are different types of clubs, but traditionally, a flying club is a group of members who pool their resources together to own airplanes. By splitting costs with 5, 10, 15+ other members, you can greatly reduce the cost of airplane ownership, but still maintain a greater level of freedom to fly when you want.
If you don't have a club near you, why not start one? Or, find some other pilot friends or family members that might want to go into airplane ownership with you.
If you decide to pursue owning an airplane in a partnership, I would highly recommend seeking out legal advice. There are certain ways to structure an airplane purchase, especially with multiple people, that can protect you financially and legally.
When you're flying hundreds of hours a year, buying might be the best option for you, but for the average pilot, renting will still make more financial sense.
Are you looking for more advice on whether renting or buying an airplane makes more sense, or are planning to purchase your own aircraft any time in the future? Contact me, and I'd love to give you some extra help to make sure you are planning appropriately.