When you acquire an aircraft through jet time ownership you are acquiring far more than just an asset. It is in effect a long-term business arrangement. Retaining high standards of safety, maintenance and security is expensive.
As with any investment there are economics to consider when you buy into any time of jet time-share program. Although fractional jet ownership does allow you the benefits of that owning a full aircraft at a fraction of the price, it is still a substantial investment over many years that require careful financial consideration for you. It is important for you to take in all kinds of different factors before you buy.
Perhaps one of the most important things to look at is the acquisition cost of the jet time-share deal. There is often a difference between the acquisition cost of the aircraft and its fair market value. This is important to understand if at some point you require to sell your interest back and repurchase a new interest. At a reputable company we will make sure that you are not purchasing an aircraft for an amount greater than its fair market value. This is not always the case with other fractional ownership companies.
Evaluating the first time acquisition costs of a fractionally owned aircraft should be a straightforward proposition. If you purchase 1/8 of a share of an aircraft with a jet time-share you need be sure that the price listed is 1/8 of the fair market value for the entire aircraft. The jet time-share company should be factoring in the aggregate price of fractional shares, which is often above the total price of the aircraft.
Whether you are purchasing a new or used interest a quality jet time share operation will make sure that you are not paying premium on this interest for joining the program. This also prevents you from losing that premium when it comes time to resell, or having to go to trouble of selling your asset for more than it is actually worth if you decide to sell it back.
Many choose to sell their aircraft back to the jet-sharing program before the end of its life. This can be because you choose to upgrade to a larger plane or wish to change programs. If you buy your jet time-share for a purchase price well above fair market value, which often happens with jet fractional ownership, you will experience a heavy economic penalty when you try to resell. For this reason, you should try to find that jet time-sharing company agrees to buy back your share at the fair market value when you elect to sell or when your contract expires. This will save you an incredible amount of money if you need to sell it back. |