How to Invest in Aircraft Hangars for Long-Term Aviation Income
Aircraft hangars are becoming a niche but powerful way to generate long-term income. In this guide, we explore how investors are using hangar ownership to tap into the growing aviation market and help you learn how location, lease models, and strategic upgrades can make a big difference to a successful investment.
Why More Investors Are Turning to Aircraft Hangars
Unlike renting (which involves continuous payments that can increase over time), owning a hangar requires only an initial purchase with minimal maintenance expenses. There are several ways hangar ownership can capitalize on the growing aviation market.
Reliable and Diverse Income Streams
Leasing your hangar to aircraft owners is the obvious benefit, especially if you identify markets with limited supply and long waitlists for hangar leases. But beyond storage, hangars can also be used as maintenance and repair hubs, event spaces, living spaces, office and workshop spaces, and in manufacturing and industrial applications.
Capital Appreciation and Tax Benefits
Just like other physical assets, an aircraft hangar is a tangible investment that can become more valuable over time. In places where land for new airport development is limited, a well-maintained hangar will become truly prized. Hangar ownership can also offer rather significant tax advantages. In the United States, for example, private aircraft stored in public hangars are often exempt from property taxes. As a hangar owner, you will be able to offer this tax benefit to renters by charging lower rates, all while earning considerable revenue.
The Perks of Owning Valuable Property
Investing in a hangar puts you in charge of a valuable asset with long-term benefits. Unlike being a renter, you get to set the rules—you decide who your tenants are, how long they stay, and how much they pay. This control allows you to maximize your income and choose reliable tenants. You also have the power to protect and grow your investment by making your own repairs and upgrades. These improvements not only add to the hangar's value over time but also help you attract high-quality renters.
What to Look for in a Profitable Airport Hangar
If you're looking to buy an aircraft hangar as a good investment, you need to think like a landlord, not just a pilot. So, it's all about focusing on the things that'll make sure you get a good return, a steady income and your investment will go up over time.
Hangar Types, Materials, and Features
The type of hangar you buy will have a direct impact on the kind of tenants you get and the rental income you make.T-hangars are great for small, single-engine planes, while box hangars are better for corporate jets or when you've got more than one aircraft. As an investor, you should think about what kind of demand there is in your target market.
Hangar material (usually steel, wood or fabric) is also an important consideration because it affects longevity, maintenance and insurance costs.(It’s worth noting that while fabric membrane hangars have become increasingly popular because of their quick set up and low cost, they have shorter lifespans than traditional materials.)
Hangar Location: Your No.1 Priority
The golden rule of real estate—location, location, location—is even more critical when it comes to aviation properties. Keep an eye out for hangars at busy airports where there's a lot of traffic, especially those with a lot of general aviation. A busy airport means there's a high demand for everything from fuel to storage.
Understanding local aviation property market dynamics is key. Demand for hangar leases can vary depending on airport size and general aviation activity.. Make sure you do your homework. Is there a waiting list for hangars? If there's a long waitlist, it means there's a limited supply and high demand, which is great for a landlord. This means you can charge high prices and keep your rental properties occupied. But if there are too many hangars, prices could go down too low.
Condition and Long-Term Costs
These will, of course, affect long term profitability. Make a careful inspection of your hangar before even thinking of signing your name on the dotted line. Structural quality, roof condition, insulation, and age will affect your bottom line. Factor in recurring expenses such as insurance, ground lease fees (if on public airport land), and periodic upgrades to remain competitive.
Tips for Maximizing Profits from Your Airplane Hangar Investment
Acquiring an aircraft hangar is just the first step. To really make the most of it, you need to have a strategy for running it and you need to know what's going on in the aviation market. Here are some key strategies to make sure your investment works out well for you.
Price Intelligently, Lease Flexibly
The most direct way to maximize your profit is through intelligent pricing. Don't just set a flat rate. Instead, research the market to understand the going rates for different types of hangars and amenities. You can then offer a tiered pricing model based on hangar size, features (e.g., climate control, office space), and lease duration. Flexible lease agreements like month-to-month leases and discounts for long-term commitments are also likely to attract more tenants.
Think Beyond Basic Storage
Educate yourself on in-demand amenities and services and make sure you’re always innovating. You could partner with a certified mechanic or detailing company to offer services directly in your hangar, taking a percentage of the service fee or charging a premium. If the airport allows, installing a fuel farm could be a highly lucrative venture. Enhanced security upgrades will, of course, be a strong selling point for leasing to owners of high-value aircraft.
Make the Most of Hangar Space
Don't let any square footage go to waste. A big box hanger can be fitted with temporary dividers to create multiple smaller spaces that can really boost your rental yield (compared to renting the whole place to one big jet.) Just be sure to pick tenants who get on well together and will create a professional atmosphere. A mix of private owners, flight schools, and charter services can create a steady, varied income.
Understand (and Leverage) Airport Policies
Make sure you understand the airport's policies on ground leases, sub-leasing and any restrictions on commercial activities in your hangar. If you know the rules and you're in compliance, you can get around the system and make the most of all the revenue streams available. Also, getting to know airport management can give you the lowdown on any potential developments or opportunities that might be good for your investment.
Key Risks and How to Avoid Them
Market Downturns
During these times, demand for hangar space might go down, which could lead to longer vacancies or pressure on rental rates. The best way to deal with this is to have a solid emergency fund to cover costs when you're a bit short. Also, having a mix of tenants, like private owners, flight schools and commercial operators, can make things more stable. This is because different parts of the aviation market might be affected by economic ups and downs in different ways.
Airport Policy Changes
If your hangar operates on leased airport land, you will have to accept that airport authority holds significant power. To avoid a situation where regulations are changed or ground lease fees are increased, meticulously negotiate your initial ground lease with clear, favorable terms. Also, be nice to the airport management. It’ll make negotiating easier.
Where to Find Aviation Property Listings and Hangar Sales
The best place to start is by looking at specialized aviation real estate websites. These platforms are designed specifically for buying, selling, and renting hangars, and they often include properties you won't find on general real estate sites.You can also check the websites of specific airports, as many post listings for available hangars or plots of land for development.
It's also important to connect with a licensed aviation real estate specialist who understands airport regulations, hangar zoning, and FAA-compliant ground leases. These agents really know their stuff when it comes to the legal stuff, especially with ground leases, and they've got their fingers on the pulse in the aviation community, so they can connect you with unlisted properties.