More and more people today are making money with cell tower leases. They are putting the cell towers on their property, which can bring in additional revenue with very little hassle. Unfortunately, many property owners are making mistakes regarding negotiating and structuring the lease, and they are losing money. To be sure that you are getting the most money possible, there are a few mistakes that you should avoid is you are going to make money with cell tower leases.
Tip #1 Don’t Let The Cell Tower Company Undervalue You
Most people look at their cell tower lease like a DIY project. They use the internet to learn everything that they think they need to know. Unfortunately, most of the information found online is incorrect. Most cell tower companies expect you to have incorrect information and they use this to increase their revenue and take your money from you. According to a study performed in 2016, the three largest cell tower companies earned over $12 billion in revenue. Only 16 percent of that money was paid to the property owners as rent payments. This is because, during negotiations, the property owners accepted a much lower offer than they deserved because they didn’t understand the in’s and out’s of cell tower leases. Be sure that the information that you are getting about leases is correct before you negotiate a lease.
Tip #2 Don’t Make Quick Decisions
When cell tower companies talk to property owners to enter into a new lease or to extend an existing one, they will often set a time limit for the property owner to make a decision. They do this so that the owner doesn’t have time to do their due diligence so that they can get a fair offer. They know that quick decisions lead to mistakes. Many companies will make threats. They will tell you that with a new lease that you will lose rent if you don’t agree. On an existing lease, they will threaten to remove the cell tower from your property and relocate it. This could cause you to lose all of your revenue. You should remember that it is your property and they need you. Take your time before making a decision.
Tip #3 Don’t Fall Into the “Market Rent” Excuse
Many cell tower companies will use the term, “market rate” when trying to negotiate a price for a new or existing cell tower lease. Most property owners look at this like a traditional real estate transaction, therefore, they fall into the market rate excuse. A cell tower lease is not a real estate transaction, it is a utility transaction. Many cell tower companies will expect you to work at the market rate that was created by bad deals that cell tower landlords made over 20 years ago. If a cell tower company starts to talk about the market rate, you should cut them off immediately. Let them know that you understand that your deal will be a utility transaction rather than a real estate transaction, and the market rate does not apply.
Putting a cell tower on your property for a profit is a great way to make money, however, you are going to need to know what you are doing. If you know what types of mistakes to avoid, you can earn a good deal of money and you won’t be taken for a ride by the cell tower company.