Posted by Daniel-ATL on June 03, 2005 at 11:44:19:
Billboards don’t add value to a property because they can be pulled down at any time unless you have a long term contract. Worst of all, they are a source of liability. They can fall on the property or people, creating a nightmare for the owner. They will bring you income, but they will also increase your liability insurance. Here is what you can do: call an insurance company and find out how much insurance you would need without the billboard and how much you would need with the billboard. That would give you some idea about its value to the property.
Posted by michaela-ATL on June 03, 2005 at 11:18:47:
Does anybody have any idea about potential value of properties with billboards?
I was just offered a lot with a small boarded up vacant
commercial building. Attached to the building are some large
billboards - not attached to the house, but on scaffolding very high up. A very large one on side of the house and 2 smaller ones on the other side of the house.
The owner is out of state and hasn’t been in the state for a while. He hasn’t owned it in a while and is just getting it back (Long story, has to do with fraudulant transfer and his
attorney is just clearing it up with the title companies) He doesn’t know what to ask and since I’m doing some other deals with him, he’s offered this to me first.
I promised him, that I’d get back to him today. ANy suggestions on how to go about it?
From what you describe this sounds like it could be a leased billboard site, as opposed to the owner just renting out signage space on the building?
If so, then you could have a triple-net tenant in place to augument the income from the house, assuming the house is what you want there. You’ll have to track down the lease… if the owner doesn’t have it then perhaps it was recorded in the chain of title.
If the lease is an old one, then there is a good chance that the locality may have adopted stricter signage ordinances since the sign was constructed, and it is a permitted non-conforming use (aka “grandfathered”). New signs will be hard, if not impossible to get approved, and that can make the site even more valuable come lease renewal time.
The downside is that if you try to redevelop the property the signs may be a problem.
BTW, the insurance issues mentioned below are usually covered by the tenant’s insurance policy.
I wouldn’t want to own my own billboard. I currently own a lot where I have a lease with one of the national ad companies, we’re going through the approval process right now. This way the billboard is THEIR property. Leases range from 10-20 years.