Alternative Investment Spotlight: Billboards

Investing in Billboards

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Imagine an income-generating investment so low-maintenance that all the tenant does is just…sit there. Savvy real estate investors have found that billboards are the perfect low-maintenance investment. Billboards require little upkeep and management but bring in steady revenue for investors. If you’re able to acquire the right piece of land, you can snag an easy investment that brings you consistent income.

Table of Contents - Investing in Billboards

To get started in billboard investing, you need two things: land and a billboard. Depending on whether you’re working with an outdoor media company or managing your billboard, your experience will be quite different.

Interested in investing in billboards? Let’s explore two paths for getting started.

Finding land and setting up your billboard

Don’t have land, much less a billboard? Before you begin, it’s important to know that opportunities for purchasing the ideal billboard space are limited. Many media companies snatch these parcels up quickly, so expect competition.

You will first need to consider local and provincial laws when selecting the best location. For example, in British Columbia billboards must be at least 300m away from a provincial highway. While the provincial Ministry of Transportation Authorities considers all billboards a distraction, it retains the right to remove any billboard it deems unsafe. Check with your province about any billboard ordinances.

Once you’ve reviewed the local regulations, you need to start researching potential plots. Pull up a map of the area and identify stretches of land along major highways. Next, contact your provincial government to ask for highway traffic count data. Traffic count data provide important information for city and highway planning officials. Processes vary by province, but the transportation department will likely have the necessary information.

Now that you’ve collected local ordinances, maps and traffic data, note the places that seem ideal for building a billboard. You want a place that has high traffic and whose local ordinances will make it relatively easy to erect a billboard.

Identifying the right space also requires thinking about what kind of billboard would work best. There are several different types of billboards:

Classic or bulletin

These are the billboards you commonly see along highways. They are typically 14m by 4 m. They need to be large enough the capture the attention of passing motorists and allow them to read the billboard safely.

Vinyl

Vinyl billboards are like classic billboards but have a brighter appearance because of the material. They are spray-painted regularly with defensive paint that keeps them bright and shiny.

Painted

Painted billboards are much less common now that other materials are available. Still, a single painted board can be useful for some messages in certain areas.

Posters

Posters are half the size of a classic billboard. They are used to promote a hyperlocal product.

Three-dimensional

A billboard can really wow its audience with three-dimensional graphics, a sort of diorama for the product.

Video

Computer-controlled electronic displays that display video and/or rotate images frequently. Many cities do not like these displays, so their use may be limited.

One way to avoid all of these steps is to buy a parcel of land that already has a billboard on it. Investors may be unwilling to sell their parcels given how little maintenance the investment requires. Keep an eye on any upcoming foreclosures and you may be able to find the perfect spot with a billboard ready to rent.

Partnering with an outdoor advertising company

The initial investment in erecting a billboard ranges from anywhere between $20,000 to $120,000. Return on investment is hard to gauge depending on what tenants are willing to pay and how long they are willing to rent the space. Some investors need help getting the investment into autopilot mode.

You may have noticed that many billboards are owned by these large media companies. These companies have large resources to ensure they can purchase available land and obtain any permits. Rather than compete, many landowners work with an out-of-home advertising company, which maintains the physical billboard and partners with the companies who lease the space. Agencies like BCE Inc., Jim Pattison Group, Outfront Media and Lamar Advertising are among the top billboard advertising companies in Canada. If you already own land along a highway or major thoroughfare, you can partner with one of these firms for a billboard.

When landowners partner with outdoor advertising companies, they lose some autonomy but receive other benefits. The biggest benefit is the steady income. What was once an inactive property is now income-generating land. The income from the small parcel needed for the billboard can help pay for the land, without interrupting regular use. Having a billboard will also increase the property’s resale value.

You don’t have to worry about marketing your space to a business; the company will take care of that for you. These companies have a deep client base and have the skills to attract new tenants who will want to rent the billboard on your land.

Regardless of what method you use for leasing your billboard, your income depends on how much you can charge for leasing your space. However, an outdoor media company will have its schedule for leases and terms.

You likely won’t have to worry about the billboard itself either. A media company can build, light and maintain the billboard at no cost to you. They will handle secondary costs like running electrical to illuminate the billboard at night.

Partnering with a company helps to reduce your liability and risk. If you manage your billboard, you’ll need additional insurance in case the structure causes any bodily or property damage. A good media company will carry insurance that minimizes your risk.

It can be difficult to get started in billboard investing, but once you do it’s an easy source of low-maintenance income. Researching the larger out-of-home marketing industry, local ordinances and how partnerships with media companies work will help you to determine whether billboards are the right investment for you.

Unique Passive Income Business - Billboards!


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Scott Dillingham

Scott Dillingham

I have been investing and lending to real estate investors for nearly 10 years now. After thousands of successful deals between flips, rent to owns, student properties and commercial assets I have developed a deep knowledge of real estate investments and have a passion of sharing this information with the world! If your looking for a lender who specializes in rental property financing you're going to want to connect with me at team@lendcity.ca.