Building vs. buying


#1

Building vs. buying

Below is a link to two billboards for sale in Texas. It would seem that it is way better to buy billboards that are already built instead of building from scratch.

The link below shows 2 mono’s for sale for $70,000 in Texas.

If you built 2 mono’s it would cost approx $100,000 and that would not include trying to find the spots!

If you are netting $500.00 on both boards after taxes, insurance and 20% land fee you could have the boards paid off in approximately 17 years you can have both paid off and be making $500.00 a month.

It seems like if you are going to spend $50,000 on a mono you would want to get the best location possible.

http://www.outdoorbillboard.com/sale/TX52.html


#2

Conrad Hilton once said, “instead of building a hotel, you are better off waiting until the depression, and buying it for a penny on the dollar”. I totally agree with that concept, and bought a huge number of billboards from the FDIC, REO departments at banks, and distressed individuals during the 1987 - 1993 recession.

It’s all about the numbers. If the numbers work on buying a billboard, then buy it. If they work to build it, then build it. One does not exclude the other. However, you have to be cautious about your rental estimates during a recession. You should one “worst case” calculation at 1/2 of what you think the rent would be with 50% vacancy and see what the damage is. If that scenario would bankrupt you, then you should pass on buying or building that location, and instead sell the lease to someone else.