Aircraft Hanger, a good investment?

[Eric Healy]

Hey BP,

I found a nice aircraft hanger at our local airport and I think it may be a good investment. I’m a pilot but not looking to use it myself. I would like to just rent it out for cash flow. I’m on the west coast, so cash flow like this is hard to find. I would like to hear all you thoughts on this one. I have never heard of any investors doing this, does anyone out there invest in hangers?

In our area, this should rent for $2000/month. My quick math says, 60K (30%) down, morgage payment $1000 plus $230 /month land lease and $125/min for taxes. This gives me a 13% cash on cash. I’m also thinking it could appreciate. They don’t build new hangers very often as there is limited airport land. This is at a pretty busy regional, commercial airport. One concern and question is about the land lease from the city, what happens when this is done?

Here are the specifics on the unit:

Large Hangar For Sale $197,500

Hangar Size: 4,125 SF (55' x 75'), Construction: Steel hangar fully insulated with efficient natural gas heat.

Lot Size: 0.19 Acre (8,125 SF) of leased land

Zoning: AIRPORT-L, M1-L,

OSPR-L, PF-L

23 years remaining on land lease.

Hangar has an office, shower, gas heat

Single lift hydraulic 53' x 18' door

200 amp service

[Forrest Williams]

How much maintenance would you be responsible for?

[David Lee Hall, III]

Check what you would need for insurance too. Also, since you have access, walk the airport and see what % of hangers are full and their condition. If a lot are empty you may not get that monthly income for some time.

[Eric Healy]

@David Lee Hall, III good idea, I will do that. Not sure about insurance.

[Sam Shueh]

Looks like a plausible deal.  My question is how hard is it difficult to lease out?

[Ron Fiscus]

How long do you plan on holding and what’s the requirements to renew the land lease?  23 years is a long way off, but I know a person with a hangar they are tearing down to build new in effort to keep their land lease.  The updates required to renew made the demo and rebuild more economical.  If something similar would be required, might start having some effect on the structure value as you near the end of lease.  Note that I’m just an amateur, but thought I would share that information, you can keep or toss it.  Good luck.

[Bill Horton]

Hey @Eric Healy, I just came across this post and I'm curious if you ended up buying the hangar and how the numbers worked out for you. I've been considering the same for investment options. 

[Jay Hinrichs]

Originally posted by @Bill Horton:

Hey @Eric Healy, I just came across this post and I'm curious if you ended up buying the hangar and how the numbers worked out for you. I've been considering the same for investment options.

I wish i would have bought some land at Aurora state.. we bought a Hanger condo.. but it was for our airplane and STUFF lots of STUFF.

Aurora since they got the tower is exploding.. and suspect you want one big enough for a Jet or turbo prop ?? 

[Bill Horton]

@Jay Hinrichs yes, it is crazy the growth Aurora is seeing since the tower. I love it and I enjoy flying there more now that they have the tower.

You are correct, I would like a larger hangar but I’m just not sure it is the best cash flow investment. I wouldn’t mind one of those large ones in the south end airpark so I could lease for multiple planes, then squeeze my future singe engine piston in there.

I’ve also thought about building T-hangars at Mulino, reading their master plan, it looks like they have defend demand and are full now.

[Huy N.]

interesting niche...any update for us since..2019? :d

[Jeffrey Alan Slachetka]

This is a really interesting asset that I have been noticing and researching as well. Has anyone else researched this asset class?

Thanks,

Jeffrey

[Austin McClain]

Adding to this thread. If anyone is in this niche, please DM me. I'm very interested in learning more.