Anyone ever buy a hangar or airport share?

[Bartman]

Hi all,

Just looking for ideas or opinions. The local airport is owned by a group of pilots/investors. There's a share that will be available soon and it's got a double wide hangar attached to it so I'm gunning to make it work.

Buying a share entitles you to a hangar but you don't actually own the hangar so it isn't a tangible asset that can be depreciated as part of an aviation business. Since it isn't a tangible asset, it's also hard to finance it.

Looking for ideas or input on how to approach the purchase, what resources there might be out there to make it possible. Also, what GA business ideas I might put to work with my Citabria to make a viable business out of it. I'm thinking tailwheel sign-offs, basic acro, sightseeing, upset/UPRT training.....what else?

Thanks!
Bart

 

[aftCG]

I feel like I've typed this up in a few places lately. My uncle is attempting to build a T-6 sized hangar at a municipal airport in eastern WA. On top of that, I rent a county own hangar at Tacoma, where it is possible to buy a "condo" hangar.
No way would I build a hangar on county owned dirt. It comes with a 30 year lease at which point you hand the keys over to the county. Yes you might get an extension. One person semi local to me responded that leases at his airport are 50 year.

Either way, you can't finance a building on dirt you don't own so you'll have a chunk of capitol (enough to buy a nice airplane) that you'll never see again. On top of that you lease the dirt from the county and pay the property taxes (nice of you, eh?) and pay an HOA. I posit that my monthly hangar rent isn't significantly less than their monthly burn rate but the guy who told me about the 50 year lease says his monthly at a smaller airport is about $100/month.

In your case Bart, it sounds like the group owns the dirt. Can you sell your share to a third party down the road or does the group have control over that? Does the group allow you to operate a commercial business or is this a lawn chair and BBQ group?

 

[Bartman]

the group owns the airport so you're not buying a lease or building, you're buying a share in the airport which entitles you to a hangar. There is a $100 per month maintenance obligation as a shareholder. Because you're not actually buying the hangar or entering into an agreement that's centered on ownership of the hangar, it's difficult to finance and at over $100k for a share, it's just as hard to pay cash! at least for me it is! I asked why they didn't make it so that you buy the hangar which makes you an airport shareholder so that financing could be based on hangar ownership and they said it was too difficult from a legal perspective to set it up that way.

as much as I tried to consider it, I took a hangar at a different airport. We're very fortunate where I live, we have two excellent uncontrolled fields within four or so miles of each other. The hangar I signed up for is about 46x35 with electric and lights so I'll be able to put the Citabria in there and the Decathlon project if I keep it. Or the Pitts as that starts to outgrow the one garage bay I'll have at home for it.

 

[volvo164]

I have a share / hangar at Brandywine airport, which is the same set up. People thought I was nuts to buy a share / hangar a few years ago (also around the $100K mark), as there were multiple ones for sale. Now there's a long wait list for people trying to rent (you can rent yours out for whatever you choose) or buy one (none for sale, if one comes up it's snapped up quickly). With hangar rental prices around $550 in metro areas, I think it's a great deal over time. In general, your share will appreciate over time. Yes you can appreciate a $100K investment elsewhere faster, but I looked at it as diversifying my investments. One way to finance it is through a home equity loan. With interests rates today, a home equity loan would be a great way to do it. I agree with aftCG, the public airport 30 or 50 year leases are not worth it - since your investment will depreciate to nothing over time, but the jointly owned airport is a great concept, also better guaranteeing that the airport will be around. Just some thoughts ....

 

[Bartman]

Thanks for the post Volvo164. All good points, I just can't justify the big investment at the moment although I'd like to!