You can’t watch television without being concerned about the future of America and, even more particularly, your finances. Relying on others is no longer a good plan. Living paycheck to paycheck – even if that check is a big one – is filled with stress. So how can you get ahead and derive financial security in today’s screwed up world? The answer for many is owning billboards.
Billboards are a unique investment option with some very attractive attributes:
- Low entry price-point. You can get into the billboard business for very little money. Although giant steel monopole signs can cost $50,000 and up, wooden signs are around $4,000 and 8-sheets can be under $500.
- Extremely high return on investment. Billboards have long held the position of probably the highest rates of return of any real estate sector – with most investors seeking a minimum of a 20% annual return or higher.
- Ability to build a large portfolio without taking away from your day job. Billboards can be managed with very little time commitment, and it can all be done at night and on weekends. You typically only rent the advertising space on a billboard once per year and then you have no further activity due until a year later.
- Superior supply vs. demand position due to billboards being federally restricted. Billboards are one of the few remaining federally regulated industries. It was the Highway Beautification Act of 1960 that actually made signs valuable, and that 60+ year old law keeps the supply of signs restricted and valuable.
Mapping out the potential
Let’s take the example of a wooden billboard, installed along any state highway or interstate. These signs typically yield about $3,000 per year of net income. If you were to build ten of them, that’s around $30,000 per year of income to the owner. A steel monopole sign, on the other hand, can generate around $10,000 per year of income, and a portfolio of ten of those would yield roughly $100,000 per year. The billboard industry allows you to custom-tailor your portfolio to meet your economic needs and the sky is the limit. Some people own 10 signs while others own 100 or more. There’s no limit.
What does it take to own billboards?
To get into the billboard industry, you need the following skills:
- Ability to think strategically. Billboards are kind of like playing a game of chess. There is a strategy involved in where you want to focus your time and understanding the billboard laws in the market, which revolve around zonings and spacings between signs.
- Decent people skills. You will need people skills to negotiate ground leases and advertising leases. Nothing spectacular, but you need the ability to work with land owners and advertisers effectively.
- Strong desire to get ahead. Warren Buffett once said that basically enthusiasm equals energy, and those who are passionate about wanting to build a secondary income stream are traditionally the ones that go the farthest.