Okay, so you’ve searched high and low and finally found the “perfect” airplane for you. Now comes the hard part: determining a fair price. This is where a lot of dreams get shattered. The problem is, the current owner tends to look at their airplane with rose-colored glasses. Everything’s better than it actually is – well, to them anyway.
That advertised “8-out-of -10” paint job is more like a 5. The interior is a bit worse for wear and smells a bit like a wet dog. In today’s seller’s market, even honest 7/7s are really hard to find.
So how do you eliminate the owner’s personal perspective from the pre-offer process? Well, here are a few guidelines.
Taking for granted that the airframe and interior are in passable condition. You’re probably going to get new paint and interior done soon anyway. Probably the biggest determiner of value is the age and condition of the engine(s). Most ads start with the engine’s total hours. Low hours since overhaul directly translate to higher value. Not always.
Say you find an engine that’s logged just 100 hours since TBO. That could be great. Or not. If the engine was overhauled in 2000, and it only has 100 hours in the past 21 years. That’s not good at all. Even with decent cylinder compression, that engine might well have considerable internal corrosion. And you won’t always find it with a borescope. That 100-hour engine could be in need of another overhaul. Buyer beware.
On the other hand, a 1,500-hour TT engine that’s been flown regularly probably has 300 or more hours remaining until it will need service. That could well be three- or four-years-worth of steady flying and may well be the better choice. Plus, you’ll probably get it at a better price.
Mod money.
Another area that can get sticky is the value of any aftermarket modifications the owner has done to the airplane. Accredited aircraft appraisers will consider many of these upgrades as helping to add value to the aircraft. Others won’t. Ultimately though, it comes down to whether or not said upgrades are important to you.
Performance or safety enhancements like upgrading the engine or adding airbag seatbelts are automatic value upgrades. Replacing old analog “coffee grinder” instruments and avionics with new digital units may well add to the value in the near term. Remember though that avionics technology changes quickly. Unless you’re planning on selling soon, it’s better to upgrade avionics and instruments to meet your personal needs now.
When it comes to determining which modifications don’t add value, well that’s up to you. It’s your option to negotiate the price down accordingly. But tread lightly. If you really want the airplane, talk to the owner to learn why he made the modifications in question. Perhaps, they know something about this particular airplane type that you don’t. Maybe there’s more value in the mods than you thought. It never hurts to ask.
Your best first step before investing in any upgrade is to find a trusted advisor who knows your aircraft and the market. They can give you an honest assessment of the aircraft and which modifications may well add to its market value.
And keep in mind adding “value” doesn’t always mean raising the bottom line. Value may well be in the form of you getting more enjoyment out of the airplane every time you fly.
The bottom line to it all is to keep in mind that the closer the airplane in question is to what you ultimately want to own, the better.
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