I was renting a hanger while waiting for the economy to turn, (still waiting.) The owner wanted $95,000 for the old hanger and I could build a new one on private property that I owned for $125,000ish. One day just before the end of the year he approached me and said if I could close quickly, he'd sell it to me for $50k. It was a great deal because he'd dumped 40 into it since I'd been there. I had 15 in cash but needed to borrow the rest, so I went to the bank and told them the story-MISTAKE #1. Never let them see you sweat. They sent a guy out to look at the building which appraised for $95,000 but they didn't like the fact that it was on city owned property- MISTAKE #2. Don't mention the hanger. At the end of the day, they took the hanger and the $50,000 property I owned across the fence as collateral on a $35k loan. I have an 800+ credit score so I think I could have borrowed money against the property and told them I was buying Mama a new kitchen and been better off not mentioning the hanger or the urgency of closing on it quickly.

Over the years I have built 7 hangars. I have even built the bi fold doors. If your handy with tools I would consider it. Do to the fact the labor is what runs the price up. Now some people on here will say your time is worth money. But to do it your self you will be surprised to the money you will save. It is not that hard to do it your self unless you have a lot of money you want to part with..

I had a similar experience years ago when I moved to San Diego. I found a T-hangar that I wanted for $50,000 (welcome to SoCal!) but wanted to only put down $10k so I looked into financing the rest. I started talking and pretty soon realized I should not be talking because I was trying to explain how the county owns the land, and it is leased to a guy, and then leased to me, and then I would own part of the T-hangar structure but I would never receive a deed since essentially I was buying a sub-leased piece of land with a structure on it that was owned by multiple people. I wasn't interested in putting anything up for collateral so that ended the deal. I also have a credit rating of ~800 but the peculiarities of buying a hangar are enough to drive most banks off.

So I now rent a hangar but I can't complain about my neighbors. Around me I have a couple of aerobatic planes, a Yak-50, Yak-52s, a P-51, a TBM, Corsair, T-6s, and CalFire's tanker fleet. It all makes for great airport noise.

Would he do a lease option for maybe 5 years? You can just rent it now and in a few years you might be in a better spot to buy it outright. If he'll apply most of your rent to the purchase price then everybody wins. Monthly payments should be cheaper to rent than buy and you could use that extra cash to pay down everything else so you have an outstanding credit rating in five years. Things change so in five years you might want a bigger hangar or none at all. Just a thought.

Just remember those AH banks when things have changed and they want you to do business and have credit cards with them. I burn my bridges.

Go to a bank that does commercial lending (if they are lending at all) they are more used to the financing "lease hold improvments" which is what you are doing on a public airport that leases you the hanger lot. That personal loan/car loan agent won't get it and make sure you debt numbers are all in order and that you have an appraisal or other value analysis to show.

I'm based at a small public grass strip airport where the airport commission leases most of the land from a church and then sub-leases the land to hangar owners. I've watched the hangar sales over the last 5 years. It's next to impossible to finance a hangar through a traditional lending institution since you don't own the land. Most of the people who buy a hangar do it in cash. Some of them are in partnership to reduce the cost-per-person if they are partners in aircraft ownership or build a hangar large enough for two aircraft. I've also heard that some of them use a home equity loan on their primary residence, but that must have been before the housing market problems. It's not an investment that will appreciate much in value and the only reason sellers can get $50K for one is due to the scarcity.

I've talked to people who have built hangar buildings at the airport and a big part of the expense is the concrete pad. Earthen floors aren't an option at my airport due to water level after a storm. Having a 40x40 pad poured over gravel and rebar can cost around $10K. The materials for the structure can cost another $15K - $25K and that doesn't include an electric bi-fold door, which can run around $120 per linear foot. It can cost $30K - $40K to build the hangar if you furnish the labor yourself. It's not hard to get the cost up over $50K if someone else is paid for labor.

Once you've built the hangar, you aren't home free. The airport commission charges you to lease the land on which the hangar rests and the cost can change from year-to-year. If you are so unwise as to anger the airport commission or violate your lease, you may find yourself banned from the airport and forced to sell or disassemble your hangar. Better to own your own land. A bank might be willing to lend you money to build a hangar on your own land using it as collateral.

If you can't pay cash, then rent. The price of hangars went into a bigger bubble than real estate, and for the most part it has yet to come back down. Too many of today's pilots have gray hair. They won't be around forever, and the next crop of gray haired pilots will be much smaller because they are currently floundering and not building wealth in this economy. Don't sign a 20 year note for something that might lose half its value or more between now and then.

Swindler wrote:...... I was trying to explain how the county owns the land, and it is leased to a guy, and then leased to me, and then I would own part of the T-hangar structure but I would never receive a deed since essentially I was buying a sub-leased piece of land with a structure on it that was owned by multiple people. ......

I own a single hangar in a building of 10 t-hangar's, on ground leased from the port authority It is a "leasehold condominium". There is a title on my hangar, and (lucky me!) I get to pay property tax every year. It's no different from owning a condo home, except for the leased land part.
I paid cash for mine, but I understand that other people at my airport have floated bank loans on theirs. There are a couple hangar buildings that are corporations, the hangar owners are the corporation stockholders who then rent their hangar to themselves. That was an end run about a temporary port rule that banned any more condo's in order to encourage developers to build rental hangars. No big deal, except I'm told that banks will not loan money to buy one of these hangars-- actually, to buy shares in the corporation.
We stared out with a 50 year land lease, but I understand a 30 year lease is not uncommon for this sort of "commercial" operation. Asssuming you can manage to not violate your lease by doing something dumb (like getting caught), the only bummer is an inflation clause like ours which adjusts the lease rate up based on the official consumer price index. But I guess that is only fair. If you can get a fixed rate or fixed rate schedule that'd be better.

Try The Bank Of Hawaii. Most of the land there is leasehold.

Ask a friend who has money. Offer collateral worth more than you want to borrow.20% down. Offer 6.25% APR. Open every 5 years to adjust interest. Someone should go for that. I might even know an investor.

Cheers...Rob

I went on a recovery mission recently to St. George ,Utah old and New airport. Seems the city/county closed down the old St. George airport in favor of a "new and improved " version about 15 miles away. Lots of old hanger buildings at the "old" airport remain -basically abandoned by owners . Really good deals on taking one or more down and moving it to your property . I think the St. George ,Utah "offered" to let you move to there "new" location another piece of property .I think part of the reason the old airport vs "new" St. George airport has to do with Ground leases --You pay more and get less .If you've got a truck and crew to take one down and relocate to your property you can find a really good bargain .I've set my sights on a 40x60 or bigger ,have land to move too-mine.

Bill, that's a great idea. Any small hangars there? I heard they were selling the land to put houses on. Guess there's more money in property tax than ground leases.