Does anyone know anything about billboard investing?

[Chris Wyche]

I'd really like to get started in billboard investing, but I know it's not a very popular method of real estate investing. I have experience flipping houses and buying/renovating small apartment buildings, so I'm familiar with that area of investing. I'm in the Philadelphia area and I'd like to explore different options such as buying or leasing land, erecting a billboard, then reaping the benefits of the insane low-maintenance monthly cash flow. A few questions:

1. Do lenders finance billboard investments or would I have to use cash?

2. How much does it cost to erect a big, sturdy billboard that you see on the sides of major highways?

3. What kind of maintenance costs are there? I'm assuming the tenant would be responsible for the electric, but what about stripping down and putting up ads?

Any help would be greatly appreciated. Thank you.

[Anthony Hornbeck]

@Chris Wyche

Only read if you're interested in the digital sign route --

I used to work for an LED sign company and from what I understood, you could expect to pay in the low 6 figure range topping out in the 200k range, for the typical side of the interstate sign.

The signs came with a 5 year warranty, including diagnostics, parts, & labor. They were managed by an automated diagnostics system and the company I worked for dispatched the technicians for repairs based on the diagnostics server. Kinda like a property manager for the first five years. You just have place your own customers is all.

Because you can reach the sign using cellular data, you can update the sign from anywhere at any time. This means that if customer #8 didn't pay on time, customer #8 doesn't get sign time. You can control who gets prime slots and charge premiums, etc.

Here is a list of the 3 top manufacturers to my knowledge. I'm sure they all have case studies as well as recommendation lists. Full disclosure, I worked for Watchfire Signs in the past, but I no longer do.

Watchfiresigns.com would be a good place to check for case studies, although I don't recall finding a lot of good economic data. Just make sure to look into OA signs, not On Premise signs. (On premise would be any business owned sign. These are not permitted to sell ad space and are typically much smaller. Think banks/schools/restaurants) Watchfire signs likely has a higher price point than some competitors, but the customer service and warranty are very good. Call the tech department if you have any questions.

Daktronics is probably the largest and best known digital sign company in the space. I believe they have a larger selection and tend to have a lower price tags when comparing similar signs. I'm not familiar with their product or services first hand, but have heard some less-than-great things about customer service. I imagine you'd want to look into cost of ownership vs competitors in the long run.

Yesco would be the third big sign manufacturer. I don't have a lot of details for you on them.

If you do decide to move forward with digital signage, I would encourage you to strongly consider a modular sign structure. By this, I mean a structure that has been designed in such a way that the components can be upgraded as technology moves forward. LED signs run the risk of becoming outdated. It may be a decade, it may be two decades, but if after that time you can retain your structure, and simply update the components, you're relieving yourself of a huge cost. (Think basic computer tower, and upgrading internal components...)

Oops...I went a little overboard and you still didn't get your numbers.