Driving along highways, it’s common to spot billboards that have seen better days: weathered, graffiti-tagged, or simply falling apart. These structures, often in prime locations but in poor condition, represent unique investment opportunities. Here’s a practical guide on how to turn an abandoned billboard into a profitable venture.
Understanding the Backstory
Each neglected billboard has its history—whether due to an owner's bankruptcy, loss of advertising permits, or obstructions that make the sign less visible. The first step in this venture is akin to detective work: piecing together why the billboard was abandoned. This insight is crucial as it helps evaluate whether the billboard’s issues are surmountable or if it’s one of the few that are better left alone.
Step 1: Identify the Owner
Identifying ownership can be challenging as abandoned billboards often lack clear markings. However, remnants like an old company shield or a state license plate on the structure can provide clues. If direct ownership isn’t clear, approaching the landowner might yield the information necessary to understand the billboard’s history and current legal standing regarding ownership.
Step 2: Secure a Purchase Agreement
Once you locate the potential owner or stakeholder, open negotiations for purchasing the billboard. Position yourself as new to the industry, which can help in managing price expectations. Aim to agree on a price that is contingent upon securing a new ground lease, which is vital for the billboard’s operational future.
Step 3: Establish a New Ground Lease
Negotiating a new ground lease is less about what was previously paid and more about what terms you can establish moving forward. Landowners, aware of the billboard’s past failures, might be open to reasonable or even generous terms. It’s essential to secure a lease that is long enough to ensure stability yet flexible enough to accommodate future changes, including necessary permits.
Step 4: Address Permitting Issues
The legality of the billboard can be a gray area. If the billboard was compliant at its inception but fell through due to neglect or regulatory changes, there might be a straightforward fix, such as updating permit fees. However, if the sign is entirely outside current legal frameworks, establish a credible rationale for its legality before proceeding.
Step 5: Finalize the Transaction and Lease the Ad Space
With ownership confirmed and a ground lease in place, close the transaction with terms that allow an exit if the advertising space can’t be rented. The success of your investment will largely depend on effectively marketing the ad space to potential advertisers.
Conclusion
Investing in abandoned billboards can be a savvy addition to your portfolio, offering high returns on relatively low investments. When you see these forsaken structures, view them not as eyesores but as opportunities waiting to be revitalized. With the right approach, you can transform these neglected spaces into lucrative advertising venues.