Is your aircraft burning a hole in your pocket? Renting out your aircraft can help you manage the cost. Here are some considerations:
Regulation and Insurance
• The aircraft needs to be commercially rated by the FAA with an Airworthiness Certificate and Registration Certificate.
• Many states require liability insurance for commercial use of aircraft, so you may want to look into a commercial aircraft insurance policy. Insurance can protect against damage, injuries, and other claims. Commercial aircraft insurance can be around three times as expensive as standard aircraft insurance, so you should consider if you will rent your aircraft out enough to cover the cost.
• Consider requiring pilots to carry non-owner's or renter's insurance as an added layer of protection. Such insurance could protect you if an incident occurs when the renter pilot is at fault.
Maintenance
• Annual and 100 hour inspections are required by the FAA for commercial use of aircraft.
• Developing a relationship with a trusted A&P mechanic or maintenance shop is critical.
Legal and Tax Considerations
• Consult with an attorney who specializes in aviation to see if it makes sense to form a business entity to provide legal and liability protection.
• Develop a legal agreement to govern how pilots rent your aircraft. StickMonkey can help you with administering the agreement and maintaining records of signed agreements.
• You may want to reach out to an accountant to explore tax strategies associated with renting out aircraft.
Operational Considerations
• Plan for and calculate all operational costs, including fuel, maintenance, hangar fees, depreciation, etc. Understand what your variable and fixed costs are to develop a pricing strategy. When you rent out your aircraft at a price greater than your variable costs, it becomes more affordable to own the aircraft.
• Craft a plan to attract pilots to rent your aircraft. Posting your aircraft on StickMonkey can put you in touch with pilots, both renters and instructors. You can also directly reach out to pilots on StickMonkey to build relationships. Ask pilots who rent your aircraft to write reviews about your aircraft on StickMonkey to attract new pilots.
• Consider working with an aircraft manager. Similar to a property manager with a rental house, an aircraft manager can handle the logistics of renting out your aircraft for a percentage fee of revenue. An aircraft manager should be an instructor pilot you trust. StickMonkey provides solutions to compensate aircraft managers directly through the platform.
• Decide on a system to schedule your aircraft. Several software solutions exist like Google Calendar, FlightSchedulePro, and Flight Circle. StickMonkey provides scheduling where new pilots are able to view availability prior to buying a block of flight hours.
• Set up payments for aircraft rentals. Venmo, Zelle, and Square are some popular options. StickMonkey allows you to collect payments through a secure process with no fees.
Screening Pilots
• Implement a thorough screening process to verify the qualifications and experience of pilots renting your aircraft. StickMonkey's verification process can help you maintain visibility on qualifications of pilots who rent your aircraft.
• Require pilots to complete a checkout flight with a qualified instructor and ensure they meet currency requirements for the type of aircraft. StickMonkey offers solutions to link renter and instructor pilots to your aircraft and manage proficiency compliance.
• Decide on policies regarding performance standards and cadence for checkouts. Consider requiring pilots to upload cockpit videos of checkouts on StickMonkey to provide oversight and ensure consistency. Such practices can increase safety and also provide valuable documentation to protect against disputes over liability.
Protecting Against Downside Risk
• Low utilization of your aircraft can be a business risk, particularly in winter. It is also important to keep the aircraft flying regularly from a maintenance perspective. Offering discounts for pilots to purchase flight hours in bulk or as a block can ensure steady utilization. StickMonkey allows pilots to make block purchases of flight hours of your aircraft through a process where the funds are held securely by StickMonkey until they are used.
• Consider requiring a "reserve" of funds when pilots rent your aircraft. The reserve can cover damage or other claims when the pilot is at fault before resorting to the insurance process. StickMonkey offers a process to securely hold reserve funds.
Record Keeping and Documentation
• Maintain clear documentation of flight records, checkouts, maintenance, rental agreements, etc.
• For accounting purposes, stay on top of records for income, expenses, capital expenditures, liabilities, etc.
Owning an aircraft doesn't have to cost you that much! With the right planning and execution, it could even be profitable.
