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”.