Playbook #032: Billboards

🖼️ The Big Picture

Billboards are far from the sexiest opportunity you’ll see in CAPITALIZE, but like many lesser-known and even looked-down-on investments, they cash flow like crazy. And some past Forbes 400 businesspeople quietly made a good chunk of change in the billboard business, including Ted Turner, John Kluge and Arturo Moreno.

There’s a bit of a learning curve to figure out how to buy or build your first outdoor billboard. But once you do and they’re leased out to advertisers, they’re a pretty solid passive investment, requiring only maintenance and management to find a new advertiser if one drops off.

As the real estate saying goes, it’s “location, location, location,” and that’s true as can be with billboards. You’ll need a legal location with good visibility, high traffic roads, and a large volume of potential advertisers. Many people getting into the business prefer to stay within a few hours of their home so that they can drive by and manage the signs themselves as needed.

There are lots of ways to get your first billboard, including:

• Buying an existing billboard
• Buying land in a good location, trimming off the billboard site with an easement, and selling it again. Make sure you have confidence it’ll sell again and cash to hold it for a while if it doesn’t.
• Bring an old, abandoned sign back to life and maximize its revenue potential
• Find a new location, figure out the permits, and either sell the land and permit to a big billboard company, or build it yourself

Supply is pretty limited due to zoning regulations, and after an initial drop in ad rates and demand due to the pandemic, outdoor advertising has regained traction and in some cases is exceeding pre-pandemic levels.

You’ll face less competition from other investors than in popular real estate spaces like multifamily and self-storage, and can start small (in some cases using none of your own money).

🔢 By The Numbers

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