If you canít find a rental, building or buying a hangar might be an option. But a good investment? As AVweb's Paul Bertorelli wrote in Aviation Consumer, donít count on it.
January 19, 2003
This article originally appeared in the March 2001 edition of Aviation Consumer.
Definition of a crying shame: returning home from the refurb shop with your $9000 paint and upholstery redo only to lash the thing down in a mudhole masquerading as a tiedown.
Welcome to the real world of aircraft ownership, where most of us tough it out in a tiedown that, if were lucky, has a thin veneer of pavement over the mud. Yes, a hangar would be ever more preferable, if you can both find and afford one.
Yet as the boomer generation ascends into financial security, a surprising number of owners are seizing the day, buying or building their own hangars, either because none exist at their home airports or because theyve grown weary of the ramp riffraff.
But what are the particulars here? Do the numbers work in favor of buying or building a hangar? No way, say some hangar dwellers; absolutely, say others. To sort out the arguments pro and con, we recently interviewed more than a dozen owners and builders of hangars. Herewith is their advice on investing in a barn for the baby.
No Way, No How
|Hank Galpins $400,000 big box includes a furnished apartment.
Every owner desperately wants a hangar and the reasons for that are obvious and compelling. Its simply more convenient. No ice and snow to remove, no hot sun blistering the paint nor rain sopping the innards, causing all sorts of mayhem, major and minor.
The standard assumption that hangaring retains value is a straw man, in our view. Although a hangar will protect the paint and keep the upholstery spiffier, the phrase always hangared ranks with the checks in the mail and Im sure I put the gear down. No, the real reason you hangar is pure convenience and nothing more. Unfortunately, rare indeed is the airport that has any hangars available at all, let alone a ready surplus. Waiting lists for hangar space are common across the country, according to our survey.
The most widely available type of hangaring is also the least desirable, in our view: group hangaring that requires line-crew towouts. Owners who have gone this route tell us its not a question of if youll suffer hangar rash, but when. Moreover, in colder climes, group hangars are often heated, which is nice, but this comes at a high cost, which isnt nice. Owners quoted group hangar rates between $300 and $1200 a month, depending on location and aircraft size.
Next on the pecking order are t-hangars; individual condo-style boxes that are rented or bought outright, with some kind of lease arrangement with the airport for the land they occupy. Average rental rates seem to hover around $200, with the lowest about $125 and the highest in the $600 range. Buy one for $10,000 to $40,000, depending on size and location.
T-hangar plusses: Theyre cheaper to buy and less involved than box hangars, putting them within reach of many owners. Minuses: tight fit in some increases hangar rash risk, and theres not much room for the extraneous airplane junk for which most owners want a hangar in the first place.
Last, the best of all worlds: the so-called box hangar, a high-ceilinged, broad-doored behemoth of a structure often capable of accommodating two or more aircraft. These hangars are more the province of owners than renters and cost from $20,000 up, whether you build or buy.
Theyre sometimes standalones or in condo arrangements. Plusses: lots of room and amenities; no hangar rash worries; good resale value, usually. Minuses: large box hangars can be expensive and, if heated, pricey to maintain through a winter.
The Land Deal
Unless you live on an airport residence arrangement, you dont exactly own a hangar in the same way you own a house, which is generally fee simple ownership. Subject to zoning laws and bank lending restrictions, you can do what you like with fee simple property.
But not with hangars. On airport property, these are generally in leasehold ownership, which means someone else -- usually the airport owner or town -- has fee simple title while you merely have a long-term right to use the land for an agreed-upon monthly or yearly fee.
For that fee, the airport may provide some services, such as snow plowing, water and sewer and electrical hook-up. Or maybe not.
Leasehold arrangements vary all over the map, literally. We would characterize some as benign, almost favorable, for the aircraft owners while others clearly favor the airport owner or developer of the hangar complex. An example of the former is the arrangement Paul Thomas has on his home airport at Anoka Country Airport, near Minneapolis.
Thomas built his own hangar but leases the land for a nominal $200 a year long-term fee. He owns his $35,000 40X60-foot hangar, which he bought already erected. Should the lease terminate, he can sell the hangar for market value or move it somewhere else. Presumably, the new owner gets the same long-term leasehold deal. As deals go, thats not a bad one, in our view.
Less attractive are the long-term leasehold arrangements that revert the hangar ownership status back to the airport, another owner or the hangar developer. We found a number of those, including one that Saratoga owner Brian Peck bought into in Oxford, Conn.
Heres the part thats hard to swallow, Peck told us. We do not actually own the hangars. After 30 years, we must, by contract, sell the hangar back to the FBO for a dollar. This means that the hangar has good residual value for about 15 years or so, but then, my resale market is restricted to guys who only have a decade or so of flying ahead of them.
Obviously, the problem with this deal, says Peck, is that the longer he stays in the hangar, the less value it has. No 35-year-old rich guy is going to be stupid enough to plunk down whatever Im going to ask when Im 70 years old only to have the hangar yanked out from under him when hes 50 years old.
Nonetheless, say Peck and others who have entered into such arrangements, theyre satisfied if not happy with the deal. It would have been better if we owned the hangars free and clear at the end of the 30 years, but the state didnt see it that way, says Peck.
Okay, How Much Money?
|Scott Witschgers box hangar was erected near Albuquerque, N.M., and cost $60,000 for 2880 square feet.
Buying or building a hangar can range from a moderate investment -- $10,000 on the low end -- to well over $100,000 for some of the finest ramp palaces imaginable.
Since total construction costs vary with size and style of hangar, not to mention region of the country, we think its useful to consider some average, per-square foot costs, less the monthly leasehold arrangement. Given the results of our survey, we think estimating average hangar costs at $22 per square foot is realistic, although the costs will be much higher in some areas.
Here are some for-instances:
60X60 box hangar, heated, with two doors in leasehold ownership: $70,000 or $19.44 per sq/ft.
-Marshall Carter, Plymouth, Mass.
50X60 box hangar, bi-fold door, insulated roof and wall for shop, in fee simple ownership on residential airpark: $28,600 or $9.53 per sq/ft.
San Geronimo Airpark, Texas
50X50 box hangar, bi-fold door, no insulation in leasehold ownership: $34,800 or $13.92 per sq/ft.
Muscle Shoals, Ala.
T-hangar, 920 square feet; insulated with heat and bi-fold door in leasehold ownership: $23,000 or $25 per sq/ft.
75X125 box hangar with 60-foot bi-fold door, heat in floor, insulated in 20-year leasehold ownership: $400,000 or $42.66 per sq/ft.
Glacier Park, Mont.
40X60 box hangar; steel with sheetrock finish inside; leasehold ownership: $34,800 or $14.50 per sq/ft.
Anoka County Airport, Minn.
60X60 steel box hangar; insulated with roof skylights in fee simple ownership on an airpark: $69,000 or $19.16 per sq/ft.
Pine Shadows Airpark, Fla.
50X50 box hangar with sliding door; self-erected in fee simple ownership on private air park: $14,500 or $5.80 per sq/ft.
Little Rock, Ark.
48X90 steel hangar with doors at each end; insulated and heated: $148,000 or $34.25 per sq/ft., including considerable paving outside the hangar.
Pellston Regional Airport, Mich.
Hangar construction options vary, but the most desirable new hangars are metal with concrete pads and aprons. Some such hangars are merely metal buildings -- say a Butler or a Mesco -- adapted for hangar use while others, such as Erect-A-Tube, FulFab or Port-a-Port are purpose-designed for airplanes.
The latter is important if an inexpensive t-hangar is your goal, since generic steel building companies generally dont make nested structures and t-hangars occupy the bottom price strata. Otherwise, a building is a building and whether it houses airplanes or farm equipment is immaterial except in one regard: the door.
Hangar owner/builders told us that door design dimensions are near the top of the list in hangar construction considerations. Says Chris Kelly of Pine Shadows, Fla., Once you select the door and the building, the manufacturers of both have to talk to each other so the dimensions are right and the front wall is designed to accommodate the load; youll need a load reaction data sheet from the door company.
There are a handful of door designs but three are practical for small GA hangars: sliding doors with tracks, bi-fold doors and swinging doors which pivot outward. Each has its pros and cons but aside from cost, climate drives door design.
In warm climates, a sliding door is a good choice, since its the cheapest option if theres no risk that snow and ice will clog the tracks, making winter pullouts a nightmare of shoveling and chipping. Track doors with outriggers are even worse than nested sliders when a foot of snow hits the ground.
Where snow is a worry, a bi-fold is desirable because it pivots into the hangar initially, so you can open the door then ease a plow blade across the door threshold, clearing the snow without heroic shoveling.
Speaking of snow shoveling, several owners said that if they had it to do all over again, they would add an overhang to the front of the hangar to keep snow from butting against the door.
I have a south-facing hangar, so when the snow melts, it slides off and piles up in front of the door and now Ive got four feet of snow to shovel, says one Vermont hangar owner.
Even in moderate climates with no snow, overhangs and/or gutters are advisable to keep moisture away from the base of the building. It seems a minor thing, but owners say it makes a difference.
|At $5.80 per sq/ft., Mike Miles hangar (top) was the cheapest we found while Jerry Jacksons $28,600 box hangar in Texas (bottom), was closer to the norm.
Some steel building companies sell a complete package, both the raw steel and labor to erect it, usually a subcontract crew. Or you can hire your own contractor to erect the structure.
In either case, say experienced hangar builders, make sure the door company and building company are dancing cheek-to-cheek so that the building is engineered to support the door. Moreover, find out how complete the building suppliers drawings are. Are they good enough for the local building department to issue a permit?
Some building companies will provide engineers stamps on the drawings, which local building departments will accept without question. Others may provide only the crudest schematics. Without this critical data, progress can grind to a halt.
One surprise for me was that I had to get a local architect to finish up the plans, which added cost, says Scott Witschger, who built a hangar near Albuquerque, N.M. Even if the drawings are complete, a local architect or builder may have to be engaged to do drawings for concrete footings and pads.
Speaking of concrete, it represents a more significant portion of total hangar cost than some hangar builders expect. Yes, the hangar cost more than we figured, says Scott Witschger, because of footings, which are quite large. I was off by a third on the concrete.
Some owners think its a good idea to be present when the concrete is poured. One owner told us the construction company that poured his slab failed to include a plastic vapor barrier: Our floors are cracking and leaking and will have to be re-poured in the spring.
Concrete specs are dictated by local code but most require 3000-pound mix poured at least four inches thick, with steel mesh reinforcing. Scrimping may cost money in the long run, says Todd Underwood, who operates a steel building business and builds hangars throughout the southern tier states.
You can trade your car in for a new one every year but if you cut corners on a hangar, youre going to have trouble fixing it, Underwood told us.
Scrimping on steel quality and construction may be shortsighted, too, says Underwood. Code dictates minimums but these can and sometimes should be exceeded. For example, the main frame uprights, which support the walls and roofs, are often placed on 25-foot centers. Adding an additional main frame on 20-foot or less centers costs perhaps 10 percent more but pays off in a stiffer structure thats more wind resistant, a plus in hurricane country.
Likewise, says Underwood, dont go cheap on the steel sidewall sheeting. He recommends at least 26-gauge galvalum sheeting, fastened with long-life or stainless drill screws that wont corrode, staining the sheeting with rust rivulets. Underwood says sheeting pre-coated with polyester paint weathers well.
When specing the building, get costs on the code-required basics first, then ask about additional structural and weather-resistance enhancements, with particular attention to the door hardware and function and anything that helps keep the hangar dry. Adding these later if you need them may be costly or impossible.
From the things-Id-do-differently file came these tidbits:
In a large hangar, install a door at both ends. The convenience of single-airplane pullouts without tedious repositioning of others is worth the cost.
Plan for as much lighting as you think youll need, then double it. Owners say theres never enough lighting in hangars. The same applies to electrical outlets.
Think about this: Hangars are high. How are you going to change the lightbulbs?
Install as many skylights as you can afford; theyll add natural light and save on lighting costs.
Shiny gray epoxy floor finishes are nice but slick when wet. Add grit to the paint or ask your concrete finishers about a smooth surface with some tooth.
Even if you dont plan a sink or bathroom at the outset, install the plumbing anyway. You can always finish out the bathroom later.
Minimal roof insulation -- even in warm climates -- will eliminate condensation, something which many hangar owners complain about.
For heated hangars, roof and walls will have to be insulated. Aluminum-faced bats and panels are best.
If the hangar is heated, install a closable continuous ridge vent. In warmer climates, an always-open ridge vent will reduce condensation.
In a heated hangar, ceiling fans will dramatically improve heating efficiency and comfort.
If you have a choice, consider site orientation carefully. Higher is dryer; lower is wetter. In warm areas, a south-facing hangar will be hotter to work in during the cool mornings. In colder areas, south/east facing will clear ice and snow from the door more readily, but the runoff will freeze at night.
In a low, wet area, foundation drains may be the only way to keep the hangar dry. Installing them during construction will be cheaper than after the fact.
Before signing a leasehold agreement, try some hardball negotiation for better terms. Some airports will be flexible; some wont. Avoid reversion deals that award hangar ownership to the airport.
|Chris Kelly probably has good investment value in his steel box hangar built on Pine Shadows Airpark, Fla., for $69,000.
Finally, the bottom line. Is a hangar a good investment or, at the least, can you get out of it whole?
Not too surprisingly, the owners we interviewed have no illusions about investment value of hangars.
An investment? Oh, no says Hank Galpin, who built a 75X125 hangar at Glacier Park, Mont. Its kind of like owning a house; a repository for your money without much growth.
And from Marshall Carter, a banker and hangar developer in Plymouth, Mass.: Youre not going to make a lot of money at the small end, if any. However, says Carter, large hangars hes built will be profitable because theyll accommodate jet operators able to pay high rent in the hangar-scarce Boston area.
A modest hangar on an airport with good demand for hangars will probably appreciate more than an expensive one, with limited market appeal.
If we sell, I think well lose said Joanne Arbaugh, who built a $148,000 hangar on a small regional airport.
Nonetheless, there are success stories in hangar purchases and we wouldnt call them rare, just not all that common. The best hangar investment scenarios seem to be in t-hangars bought five or 10 years ago and flipped for a 20 to 50 percent gain in value. These deals seem limited to airports with high demand but little supply.
Otherwise, hangars may be more like equities than real estate. The longer you keep them, the higher the value but spikes and valleys in value may be determined by the national and local economy. Equivalent real estate purchase may be more stable.
Long term, says Scott Witschger, I do think its a good investment. Absolutely. I do my own maintenance and in some rental hangars, you get a hassle for that.
Ultimately, our impression is that most owners who buy or build hangars consider it an emotional, feel-good purchase and dont give a hang about the investment value. Besides, any savvy aircraft owner knows that if youre interested in investment value, keep your money as far away from airplanes as possible.
We like Brian Pecks outlook best: Obviously, if I had to depend on the resale value, I would not have bought the thing. But having my airplanes and tools and oil cans and rags in my very own hangar with a refrigerator full of Coke and beer makes me happy. Theres no reason not to buy a hangar, except money.