If you are looking for a way to make money without a lot of capital, man-hours, or a steep learning curve, consider owning billboards. Investors can get started with little money down, and can grow their outdoor-sign business as large as they choose, determining their level of income.
Billboards come in all shapes and sizes, residing in urban downtowns, small cities and along highways all across the nation. Outdoors signs have even gone global, and the earnings potential is great, says Frank Rolfe of OutdoorBillboard.com.
“I think there are so many courses and infomercials and investment programs on foreclosures out there, that the foreclosure market has been beaten to death. But not too many people are talking about billboards,” Rolfe says. “And there are many multimillionaires, like Ted Turner for instance, who earned a lot of their money from billboards.”
To get started in the billboard business, you have to decide which niche-within-this-niche you are ready to pursue. Most beginning billboard investors look to erect wooden billboards in small- and medium-sized towns, Rolfe says.
“Most people start in the outdoor sign business with these wooden billboards,” Rolfe says. “You find a landowner or farm owner and offer him, say, $500 a year to use a tiny bit of his space to put up a billboard. Then you get plywood and build one for a cost of about $4,000 to $8,000. Then you lease the sign at maybe $3,000, typically for a year lease per side. The advertiser provides the actual vinyl sign, and you collect the rent.”
The keys to this type of investing are getting the right city, county or state permits and finding the space. Once you have a legal billboard in place, you go into sales mode to find an advertiser to lease it. After that, there is really no other work to do until the lease comes up for renewal.
“I know people who sell 10 sides and make $30,000 a year, and people who have 100 of them and make $300,000 a year,” Rolfe says. “It all depends on what you want to put into it. I think it’s a great niche market because it’s not super-competitive. ”
Rolfe says the way to get started is to research the outdoor sign regulations in the area you are interested in. Once you know the size and zoning requirements the sign must meet, you can look for high-traffic spots where a billboard would be legal. Once you find your spot, negotiate the ground lease and get the permits, it’s time to sell. Here’s what you need to do to keep it legal:
- Get good legal advice. If you do not have an attorney draw up the contract, at least make sure the one you are using covers all the bases. A good legal adviser can reassure you that you are doing everything according to the right contract terms and state or city permits.
- Make sure you use a good contract. You can find contracts online, both free and for a fee. You can also have an attorney draw one up for you. Make sure the contract contains the sign’s location, plus what will be advertised on the face of the billboard.
- Include the lease terms in your contract, such as the beginning and end date and what each party’s responsibilities are during the lease term.
- Put in the payment details, both the due dates, methods of delivery and any penalties assigned for late payments.
- List the ways that changes can be made to the contract and how this needs to be communicated between the parties.
Another way to make money in the sign business is to “flip” billboards. Basically, it works like this: You find a legal location where a billboard can be located and apply for the permits to build one and get the lease for the land. Then instead of building one, you sell your permit and lease to a sign company.
“This works best in larger markets and big cities,” Rolfe says. “It’s a great business, because you can start it with no money. You get the ground leases and permits and scout for the billboard companies to purchase them from you. You never actually take possession of anything; you are just buying the right to build it. This niche is about strategy. It’s like a chess game.”
A third avenue of outdoor media investing is steel mono-pole signs. These cost $50,000 to $100,000, Rolfe says. He doesn’t recommend this type of investment if it will tie up most of your money in only one or two signs. Investors can also look for nonperforming signs (empty billboards) and fix them.
“You negotiate to buy the structure, really for the ground lease, then fix whatever is wrong with it,” Rolfe says. “This is where you get to be creative. You might just need to tear the sign down and build a new one, or you might be able to figure out if the sign just hasn’t been marketed right or needs to be rehabbed.”
For example, Rolfe bought a sign in Fort Worth in a rundown area. A larger outdoor media company owned it and thought the neighborhood was too depressed for the company to be able to generate income from the sign anymore. Rolfe bought it, spruced it up and rented one side to a bail bondsman and the other side to an attorney.
“It had been abandoned for five years because it just hadn’t been targeted right,” he says. “Overall, billboards can be a great business to start. A lot of people in retirement generate income from this as a hobby. It is very management non-intensive, because there are no moving parts. Nothing can really break down. Unless a tornado comes through and blows it down, there is very little maintenance. Plus, you can typically sell one-year contracts, so you only have to go out there and sell once a year.”
OutdoorBillboard.com offers live “Billboard Bootcamps,” as well as an extensive listing of billboards for sale and rent.
Tags: billboards, outdoor advertising