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HOW TO APPROACH BUILDING
A BILLBOARD ON YOUR
PROPERTY FROM A-Z
So you’re interested in
having a billboard built
on your property to pick
up some extra income?
This chapter is designed
to guide you through the
many considerations and
steps necessary to start
and complete this
process.
IS YOUR LOCATION LEGAL
FOR THE CONSTRUCTION OF
A BILLBOARD?
The first step in
deciding whether or not
a billboard can be built
on your property is to
learn the laws regarding
this. There are two
laws you have to worry
about – state statutes
and local, city
ordinances. For a
complete list of state
ordinance sources,
please refer to that
section earlier in this
book. For the local
laws, you will need to
call your city hall and
ask them. It is
important with the local
folks to see the
ordinance in writing,
otherwise you may just
be told some urban
legend that the city
employee doesn’t really
understand.
To ascertain your
legality, you will also
need to learn your
property zoning, as well
as the distance from
your property to the
next closest billboard
in each direction on the
same side of the road as
you.
Once you have reviewed
the ordinances and your
property specifics, and
if you still appear to
be legal, then it is
time to move on to the
next step.
WHERE WOULD YOU PUT IT
If your property is
legal for a billboard,
where on the property
should it go? The key
considerations are
visibility (best place
to see it from the road)
and non-intrusion to the
operation of your
property (the middle of
your driveway is a bad
idea). Pick a location
on the side of the
property line, if
possible, or a
non-usable area such as
next to a creek.
HOW MUCH MONEY SHOULD
YOU DEMAND FOR GROUND
RENT
For this one, you will
need to review the
entire contents of the
Billboard Lease
Negotiating book.
It is a very time
consuming and thought
provoking process to
ascertain a fair amount.
SHOULD I USE A BILLBOARD
COMPANY OR BUILD THE
SIGN MYSELF?
For most landowners,
building their own sign
is a bad idea. Unless
you have $50,000.00 cash
and the best location in
the world, you will
probably have a tough
time financing and
operating a billboard.
Renting the space is a
lot harder than it
looks. So unless you
have a location in a
major city with
fantastic visibility, I
would not even give this
a second thought.
If, however, you are
convinced that you
should be the
owner/operator of the
sign, then here are some
suggestions.
·
Talk to a bank first
before you get too
committed to this idea.
The bank may shoot you
down almost immediately,
and you can save
yourself a lot of wasted
effort. Most banks are
very negative about
making loans on
billboards, and with
just one sign you are
way too small for a
larger bank that does
such loans.
·
Consider hiring another
billboard company just
to manage and rent your
sign. Some guys will do
this, and at least it
gets you up to speed as
far as renting the space
goes. Figure on paying
25% of gross for this
service (nearly the same
as the ground rent you
would receive if you let
the billboard company
build it).
The only time that you
would want to consider
building the sign
yourself, in my opinion,
is if you have a really
hot location, and you
want to sell the ground
lease and permit to
another company for big
money.
Here’s how it works.
You will need to set up
another entity with the
name “Outdoor” on the
end of it. Then do a
ground lease between
yourself as property
owner and yourself as
owner of the billboard
company. Pull your
permit in the “outdoor”
name. Then package and
sell these two items to
a real billboard
company. Is this it
worth it? Well,
considering that a hot
location might sell for
$100,000.00+ and has no
impact on your ground
rent (even better you
can design your own
ground lease with all
the things you want in
it, to be assigned to
the buyer), I’d say it
is. Again, this is only
for those rare, super
valuable locations.
Otherwise, this concept
is a waste of time.
HOW DO I FIND A COMPANY
TO RENT THE GROUND SPACE
FROM ME TO BUILD A
BILLBOARD?
All right, so you’ve
decided to let a real
billboard company build
and operate the sign and
pay you a ground lease.
Now the challenge is to
find the right company
and get the best offer.
To find a list of
candidates, you can
visit
OutdoorBillboard.com's
list of Billboard
Companies. You can
also consult your local
yellow pages under the
section “Advertising –
Outdoor”. This,
unfortunately, is your
whole sea of prospects.
No non-local company is
going to move to your
town for one sign.
You should make a
spreadsheet of these
local prospects and
their addresses and
phone numbers.
The next step is to call
each one and ask if they
would be interested in a
billboard location on
your property. Most
everyone will say yes,
and then set up a
meeting with them to
discuss it. Meetings
are the key – this is
too important to be
delegated to phone or
mail.
At the meeting appear
like a nice guy that
wants the best deal, but
is fair. If you appear
to like a competitive
bid situation, a lot of
companies will get
turned off and not even
make an offer. Let them
know you are not bidding
it around the whole town
but have narrowed down
your list to just a few
companies.
Delay and stall for a
time until all the
offers are in. Offers
should be in writing and
may even be in the form
of a lease for you to
review. Once you have
the group together, pick
the top two or three and
counter them to see what
happens.
Once you have a clear
winner, have an attorney
review your lease. I
promise that you will
regret it later if you
don’t. Not that I like
attorneys, but I hate
seeing people mess up
their lives by trying to
go it alone and not use
professional help.
NOTE; IF YOU DECIDE TO
BUILD THE SIGN YOURSELF,
THEN THERE ARE MANY
ISSUES TO RESOLVE SUCH
AS WHAT SIZE TO BUILD,
HOW TO RENT THE AD
SPACE, ETC. ALL OF THIS
IS COVERED IN FRANK
ROLFE’S BOOK ENTITLED “BIG
BUCKS FROM BIG SIGNS”. |