Revenue Is Not The Same As Return
Put a big steel monopole next to a little wooden sign on a few poles and ask most people which one makes more money. They’ll point at the monopole every time. It’s taller, it’s shinier, and it probably rents for more. But that’s the wrong question. The right question is not which sign brings in more revenue. It’s which sign puts more cash in your pocket for every dollar you spent to own it.
When you run the numbers on a typical pair, the answer surprises a lot of folks. The steel monopole has a return on investment of probably around 10%. The wooden sign is around 50%. That’s five times more.
Why The Little Sign Wins
Steel monopoles cost a fortune to build or buy. You’re paying for engineering, a massive foundation, a crane and a crew. The rent is higher, but not nearly high enough to make up for that price tag. The wooden sign is cheap to buy and cheap to keep up, and in a decent medium-sized market it still rents to local businesses that just want to be seen. Smaller check, much smaller investment, bigger return.
Think about it this way. If five wooden signs bring in the same revenue as one steel sign, you’re far better off owning the five wooden signs. Same revenue, a lot more cash in your pocket, and your risk is spread across five locations instead of one.
What Hasn’t Changed, And What Has
The basic math hasn’t moved. Billboards are still one of the few kinds of advertising the internet hasn’t eaten. Local businesses still need to reach drivers at the moment they’re making a decision. And under the Highway Beautification Act of 1965, the supply of signs along federal-aid highways is still tightly controlled. That limited supply is what gives an old wooden sign its value.
But you have to go in with your eyes open. Many wooden signs are legal nonconforming structures. They’re allowed to stay, but most states won’t let you enlarge them or change materials, like going from wood to steel. Some states also say that if you replace too much of the structure within a set period, the sign counts as destroyed and the permit is gone. So your job is ordinary maintenance, done carefully and by the rules.
How To Use This
- Don’t overlook small wooden signs in medium-sized markets. That’s where the real returns hide.
- Judge every deal by the cash return on what you pay, not by the gross rent.
- Read the permit and your state’s nonconforming sign rules before you buy.
- Keep the structure in good repair so you’re never facing a rebuild question.
The Bottom Line
Big steel signs get all the attention. Little wooden signs quietly make the money. If you want the most cash for the least investment, start looking hard at the humble wooden billboard. It may be small, but the return isn’t.
