What a terrific site…I just happened across this while researching the potential for investing in billboards. I inherited land that has an interstate right-of-way through it. If I was willing to invest say 80K into a steel monopole structure, what should I be targeting as my return on investment to make this worthwhile?
The first thing you need to do is to contact your state Department of Transportation, and your local city government, and see if it is legal to put a billboard on your property. There are certain zonings and spacings that billboards require, and you need to make sure that you have them.
I’ve done that part. However, it’s the cost of the structure and the potential to recoop the investment that has me hesitant. Before I take the plunge I would like to discuss rates with potential advertisers, ideally even have them signed-up to put their ad on the sign. If I knew what the industry target is for ROI on a sign like this is…it would help me determine whether local businesses are willing and able to pay the rates that would be required. I’m looking into a steel monople, 60’ OAH, double-sided V, 14x48, with electric lighting.
OK, here are your next steps. 1) Call on every vacant billboard on that street and see what they charge – become the expert on billboard rents on that piece of road. 2) See if the rates can give you at least a 20% return on the cost to build the sign 3) If it looks favorable, pull the permit 4) Call other billboard companies and see what they’d give you as ground rent, if they built the sign 5) Do the math and see if the return is higher letting them build the sign and pay you rent, as opposed to building it yourself and having to recoup that investment 6) Pick a direction and go. If you end up building it yourself, you’ll need to figure out exactly what to build, find the best contractor, and learn how to rent the ad space. If you let a billboard company build it, you don’t need to know any of those items.
So basically, if the structure pays for itself in 5 yrs or less that is an acceptable ROI. A Sales Executive for a billboard structure supplier told me that if the sign paid for itself in 2 years, I would be doing good. Honestly, I couldn’t see being able to do that in the relatively rural area that the sign will be in. Tourism is the no. 1 industry here, and while there are resorts and attractions that are interested, it seems that 33% return or the sign paying for itself in about 3.5 yrs is a more realistic goal given local circumstances. It seems that I would need to keep rates as reasonable as possible in an effort to establish and maintain long-term regional relationships. Thank you for your specific advice, this is excellent.
Can i ask you, how much was the quote to build steel monople, 60’ OAH, double-sided V, 14x48, with electric lighting?
Where about a you located?
Any quote that I might obtain from a billboard fabricator is based on my local and particular circumstances and preferences. You will need to do some homework to gather pertinent information particular to your circumstances and conditions.Things that need to be considered before requesting a quote: (1) How high above the surface of the roadway do you want the signface to be (get elevations from road surface and ground level at site where sign will be built); (2) What will be the width of the “V” that will be required?; (3) What are the soil conditions at your site? You may need soil testing / borings to determine what type of foundation you will need; (4) What are the windload requirements specified in the state/local building code?; (5) What type of sign face or panels do you want on your structure?; (6) What kind of lights (if any) will you want installed?.
Also consider: (7) Is there electric service at the site? If not, what will it take to get electric service to your sign?; (8) Is the site accessible? So, as you can see…these factors can have a significant effect on the cost of constructing a billboard structure. Do your homework on these and have the information available when requesting a quote.