Ask any money expert and they will all give you the same piece of advice. They’ll tell you that one important way to make money is to find passive income opportunities.
Passive income is where you only have to work on something once but then you continue to earn an income once you’ve finished the project. Actors earn passive income for movies and reruns.
Paid parking lots are another form of passive income. Then there are cellular towers. The ultimate form of passive income.
You as the landowner literally have to do nothing to nothing except permit a cell tower to exist on your land. The only physical work you do is to sign the lease.
But if you don’t know what you’re doing, you could lose out on some serious income. Keep reading to learn all about cellular tower leasing.
How to Make Money With Cellular Tower Leasing
A whopping 95% of all Americans now own some type of a cell phone. As we continue to turn to our cell phones to navigate the internet, there’s little worry that cell phone usage will decline anytime soon.
Which means cellular towers are needed across the United States in order to ensure that we don’t lose coverage from sea to shining sea. Except, if you haven’t already been approached about your land or property, you most likely won’t be.
Instead, you’ll have to find someone who already holds cell tower lease agreements and is looking to sell. But once you do, you stand to earn a lot of money.
Your Options With Cellular Tower Leases
Once you’ve found a cellular tower for sale, you have a few options. You can buy and hold, buy out the lease, or consider it a fixer-upper. Let’s take a look at what each option can do to earn you money.
Buy and Hold
A buy and hold is the easiest way to make money on cellular tower leases. You simply buy the cell tower site along with the lease.
It’s typical for a cellular lease to have an escalation clause included, meaning that just by holding onto the lease, your income will steadily incline over the years.
Buy Out the Lease
It’s sometimes possible to simply buy cell tower lease agreements, even if you don’t buy the property along with it. You would simply own the cell tower property or at least you would have the right to lease payments.
In that case, you’d pay a flat sum in perpetuity, for the right to those lease payments. Just make sure the lease isn’t going to expire right when you try to make a payment.
Consider It a Fixer-Upper
How much does a cell tower cost? It depends on the condition of the cell tower property. In some cases, there are problems that need fixing.
However, that doesn’t mean you can’t still make good money on cellular tower leasing. You can purchase the property along with the lease and then fix the problem.
After that, you can sell the property with or without the lease for a tidy profit.
How Much Does a Cell Tower Cost?
Besides the condition of the cellular tower property, there are other factors that determine how much does a cell tower cost. You can click here to learn more about cell tower lease agreements and rates in your geographical region.
But even if there are some problems with your property, it costs the cell company over $250,000 to replace a current cell tower.
That means you have bargaining power, no matter what. Cell companies don’t want to have to spend time and money rebuilding what they already have. Especially when there’s no guarantee they can find another location.
Also, the more antennae’s you have on your tower, the more money you earn. Cell companies happily pay large rents to those willing to allow them to place a second, third, or even fourth antenna on an existing tower. Doing so can more than double your rent.
And while it may state in your lease that the company can cancel at any time, there’s really nowhere else they can take their business.
Helpful Tips to Getting the Most Money From Cell Tower Lease Agreements
Always have a lawyer help you look through any cell tower lease agreements before you sign on the dotted line. Make sure your lawyer specializes in cellular tower leases.
A good attorney can help make sure you receive the most amount of rent possible from cellular companies. They may even get the cell phone company to reimburse your legal fees or reject certain amendments because it would harm you somehow.
Always allow your lease to come up for renewal. You’ll end up receiving a lot more money by renegotiating your cellular tower leases than you will if you merely extend them.
Make sure you never sign anything that can create problems when you want to list your cellular tower for sale. And don’t let the main company leasing your cellular tower to sublease to other providers.
If that happens, the main lessee is the person making the additional revenue instead of you. Make sure you as the owner are receiving those extra profits.
Get Paid For Any Changes to the Cellular Tower
While it may seem admirable to allow a cellular company to make modifications, expand, or even upgrade their installation, don’t agree to any changes without a large increase. This includes any changes the cellular company claims are for 911 purposes.
While that may seem noble, 99.99% of the time, those towers are used for commercial purposes, not for saving lives. And either way, you still deserve the extra income you’ll earn every time any type of modifications, expansions or upgrades are done on those towers.
Lastly, a cellular company may try to scam you into lowering your rent by claiming they’ll cancel their lease. Again, you’re pretty much the only game in town, so don’t fall for it. There’s really nowhere for them to go.
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