Anyone invest in Billboards?

8 Replies

Tonight I was at a Seminar, and one of the things he was discussing was investing in Billboards. He talked about how the average price to put a Billboard in the ground was approx. 66k, and that you can charge 7,500 per/ mo. per face. 7,500 x 2 = 15,000, which is a substantial amount of money, and no hassle of tenants. I'd imagine this land is hard to come by, and not necessarily the most efficient, but I just wanted to share, and see if anyone had experience in this department?

@Shane Short

None here.

Completely anecdotal but there was a 2 mile stretch on I 80 driving back to Des Moines from Chicago for Labor day, where it seemed every billboard had a 'RENT ME' type of notification on there.  Not sure what that was about.

I have no experience in this but would be curious to learn from others experiences if they can share....

I think they are outdated. Everyone (except for the driver hopefully) has their face buried in their phone as they're driving along. I think a lot of companies realize this and are less likely to spend that kind of money on advertising on billboards. 

Hi Shane,

We have a lot of experience with billboard development.  You are exactly right.  It is very difficult to get the permits for the locations that generate $7,500 per month, per display.  Those are usually in major cities where the ordinances are very restrictive and there are usually big public company competitors working around the clock to lock up those locations, so competition is fierce.  The average cost is a very big generalization.  We see routinely see costs that range from $20,000 to $120,000, so $66,000 may be the average, but depending on site conditions, you could spend significantly more than that.

@Shane Short You've received some great advice here. I run across billboards in my tax lien investing and have a little experience and a lot of research into the business. It is a great income generating business with less headaches than dealing tenants. There a a few ways to make money in the business that I've looked at.

  • You can buy or lease a parcel of land that meets the qualifications for a building a billboard. You negotiate a lease or purchase the land - but make sure you can build the billboard on that parcel first.
  • You then get the billboard permit from the state - and maybe the county and city. You'll be checking federal, state and local laws on billboards.
  • You can build the billboard yourself, which means you get the engineering done (needed for the permit) and then source the contractor and materials, don't forget electrical run to the board if lighted.
  • If you retain ownership of the billboard, you'll need to get an insurance policy to cover any damage from the billboard falling over or coming apart.
  • You'll have to arrange to lease the space. Usually paid every 4 weeks (13 payments a year). You may have to source the vinyl signage and installers. Your lease negotiation can be on your terms but most are for 6 month or 1 year leases. Discounts are usually offered the business for the longer lease. You can outsource to a billboard "sales company" for finding your renters. You of course pay a percentage of the rent you receive to the sales company.

There is a lot more involved but that is the first way to start a billboard business. A simpler method is to just own the land that already has a billboard. That is how I stumbled into this. I had a tax lien on a parcel along a freeway and it had a two sided billboard on the parcel. When the owner of the parcel did not pay the back taxes, I started a tax lien foreclosure. I researched the area and found the city had stopped allowing new billboards, but this one was grandfathered in. It was run by one of the large national billboard companies and one side had had a long term lease with a business and the other side was coming up for renewal at $1,200 every 4 weeks. 

So that would generate about $2,400 x 13 payments a year = $31,200 revenue each year for the billboard company. My research showed that a land lease is usually negotiated for between 15% and 20% of the revenue. That would mean if I foreclosed on the parcel and became the landowner, I would get about $4,680 and $6,240 a year. All I would owe would be the annual real estate taxes of $500 per year. I wouldn't have to pay the sign upkeep, the insurance, or find the renters - the billboard company does all that. Nice return for doing almost nothing.

There are other considerations - if you just lease the land to the billboard company what do you get if the sign is not rented? How do you make sure the billboard company has the proper insurance on the sign, etc.

The owner of that parcel paid the back taxes at the last possible moment, so I did not end up with the parcel, and I have had other parcels with billboards also pay the back taxes too. Why give up the simple money for just leasing the land an have the billboard company do all the work?

Digital advertising in particular, but all billboard advertising is actually it a high right now as far as density and quantity. That being said, some states don't allow it at all and there are movements to stop it in many other states. I just wrote an article on it for a PA magazine, if anyone is interested, it's in my blog!

@Shane Short

Just as @Jerry K. , I ran in quiet a few on doing research on tax lien. Most locations I have seem are abandoned or at least have no more advertising on it. Of the few that I intended to bid, the owners paid back the tax before auction.

@Jerry K. Thanks so much for your detailed reply! So informative! I will definitely continue looking into this, it is extremely interesting. 

@Jessica Zolotorofe I will look at your blog for sure! I love good information. Thanks so much for your reply!