Investment VS. Return


#1

Hello Again Guys,

I was looking at some of the signs for sale and was wondering if I am doing the math wrong.

Here is a billboard for sale for $150,000, nice board in a nice location.
http://www.outdoorbillboard.com/sale/FL76.html

It is brining in $4,000 month, divide that by the cost $150,000 comes out to 37 years.

Wow, talk about long term investment, The lease may not even that long and hopefully the billboard last that long.

Am I missing something here?


#2

John,

I think you made a math error. The rental rate is $4,000 per month - so by using your analagy, the payback would be 37.5 months not years. However, if you take a 50% expense ratio, then it would 75 months.

Dave


#3

You are correct, thank you! 6.25 years sounds like a good return rate.