A billboard, simply said, is outdoor advertising. Many small investors that buy homes, flip houses, or have rentals have never considered the massive amount of money that is in billboards.
Clear Channel, Viacom, Peterson, Lamar, Metromedia, CBS, and Canada Pattison are the big players in this arena. There are smaller regional players also, but these companies are all multibillion dollar companies with a large portion of revenue coming from, you guessed it, billboards.
You don’t have to own the property to put up a billboard. You can make a permanent easement on someone else’s property to get the landowner to give you permission. One way you do that would be to give them shared revenue. They get a small part, and you get the larger part of the revenue. You could also do a one-time purchase for the easement; you could lease it on a long-term lease, like 99 years. The nice thing about investing in billboards is when you want to liquidate once you’ve established a certain number of them, you can sell them at a multiple of annual revenue.
Let’s talk about billboards on interstate highways. If it says interstate that means a federal government helped to fund the road and you can have a billboard every 1,475 feet legally. The legality of billboards in a city can have a moratorium banning them. A county can also have a moratorium banning billboards for the entire state. If you want billboards on the side of the road and the state does eminent domain to expand the highway, they will either compensate you generously for your billboard or give you permission to put another one up at their expense.
Billboards are usually built at a foundry where they put together the components, then install them at the location site. They’re placed in the ground with a large quantity of concrete, after holes are drilled in the pipe so the concrete goes all the way through. That’s why after a bad storm you rarely see a billboard flattened. Many of the foundries that make the components for billboards have everything required and will deliver. Cities, counties, and states require an engineering stamp; the foundries can also provide that background for you. Billboards are 14‘x 48’. Certainly, they can be smaller than that on county, state, or country roads, but in general terms that’s how they’re designed. The canvas is the face of the artwork and lettering is computer generated. The largest facility for doing billboard canvas is in Dallas Texas; there’s another one in Mexico.
We strongly recommend the one in Dallas. You can send them a business card and they can blow it up to 14‘x 48‘ on a canvas that can be attached to the billboard, and it will be perfect. The individual or company leasing the billboard will pay for the artwork. You want a minimum of a year’s lease for them if not longer. The best customers for billboards are car dealers, car manufacturers, doctors, medical professionals, dentists, homebuilders, restaurants, and theme parks.
It’s easier to get billboards in a county than in a city; for obvious reasons, land usage spacing. If you have billboards in a county or city and they pass a moratorium banning them they grandfather in the existing ones but now nobody else can get in so it’s classic supply and demand. You control the billboards that are there, and it allows you to charge higher rates because nobody else can get into that market.
Billboards can also be placed in between multiple telephone poles. It doesn’t have to be that elaborate to bring in a revenue stream. We have seen a lot of those for builders that are doing huge subdivisions. The contract for those will typically be 3-to-4-year periods, which obviously covers any expense associated with putting it up. The point of these examples and comments are just to show you that if you want 10 to 20 billboards, the revenue you will make off that will surpass what you could potentially make off 10 to 20 rental houses and you have no toilets, no disposals, and no bad tenants. If someone doesn’t pay you on time you simply cut the line and pull their canvas down removing their billboard. That’s all in their contract and it’s a better model in many ways than anything we have seen.
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