Business & Finance Investing & Financial Markets

Outdoor Billboards - You Do Not Have to Own Property Or Have Lots of Cash to Make Money

One of the most common myths about investing in outdoor billboards is that it takes a lot of money to get started.
Another misperception is that you need to own the actual property in order to generate billboard income.
Both of these beliefs are complete fallacies.
In fact, if someone is telling either one or both of these, carefully consider their experience with billboards.
My hunch is that they have little or no experience investing in billboards.
Myth #1 - It Takes Money to Make Money One of the main reasons why I am a fan of outdoor billboards is because it does not require a huge investment.
The biggest obstacle is not money; it's the "know how".
This industry is a niche industry compared to other real estate investments such as single family homes, apartments and commercial property.
Those who are successful are also reluctant to give away their trade secrets.
In order to completely dispel this myth, let's take the money argument at face value.
In other words, there are legitimate cases where someone may not have enough funds to invest in constructing one single billboard.
What options are available in this case? Well, if you have a legitimate opportunity, there are financing options.
I use the word financing liberally because a billboard could be financed through friends, family, investors, lending institutions, and money lenders.
One may even be able to get the property owner to finance the construction for a share of the income.
I believe money will also follow once the deal appears.
In the extreme case where the billboard cannot be financed at all, you could still "flip" the deal to a billboard company.
In this case, you would need to lock up the location before approaching the billboard operator.
Your value add to the deal is the fact you have a signed agreement with the landlord as well as the appropriate permits (city and state depending on jurisdiction).
You've now created value because you've done the leg work for the billboard company; they can now build the sign and lease it out.
Myth #2 - You Need to Own the Property By now, you may have picked up that investing in billboards has nothing to do with owning the actual land.
If you own real estate where billboards are permitted, this is certainly a nice way to increase cash flow.
However, you don't need to own the land to break into this cottage industry.
In fact, I'll explain several ways to get your foot in the door without having to invest in real estate.
The first method is to enter into a ground lease with the property owner.
In this example, once you identify a location where billboards are legally permitted, you approach the owner and negotiate a ground lease.
In other words, you propose a lease agreement where you have the right to construct a billboard in exchange for rent.
In order for this example to be profitable, you must be able to rent your sign for more money than you are paying in rent and other operating expenses.
A second method is to sub-lease an existing sign.
If you can find a sign that does not have an advertisement, there might be an opportunity to lock it up and then lease it out.
In this example, you need to do your research.
There is probably a reason why the sign is not rented out.
If it is a simple cosmetic issue such as an obstructed view due to an overgrown tree, this can be easily fixed.
You've now rehabilitated the sign and create value for the advertisers.
Third, you can always purchase an existing sign.
Instead of investing in the actual property, you are purchasing an existing sign.
You'll also need to perform a careful due diligence in this case.
Some of the things you'll want to investigate are valid permits and the actual agreement.
Approximately 20% of my billboard portfolio was developed through acquisitions.
In some of these acquisitions, I did not have to pay a single penny out of my own pocket.
Conclusion I've debunked the two most common myths about outdoor billboards to help you see that getting started is not as difficult or as intimidating once you have the proper education.
If you have the passion and drive, I will gladly teach you how to succeed with billboards and how to avoid the common mistakes most people make when they don't have the proper knowledge.

Leave a reply