New revenue stream -Billboards on IP's

[Sunstone]

Dear guys,

My latest IP purchase is on a corner block of two high traffic streets that have traffic lights on both of them.

To me it seems an ideal opportunity to put a two-way billboard up and generate commercial rental income (good old GST input credits) on an otherwise residential property. Also seems to be a low cost way of increasing the rental yield on the property.

Practical questions:

-Has anyone done this or know of anyone who has? (What type of experiences?)
-Did they approach an outdoor advertising company?
-How is the best way to achieve the best possible return? (Would expect that I would retain ownership of the sign but have to pay a commission for them supplying the advertising and also replacing the signs on a monthly basis.)
-What sort of costs are involved?
-What sort of information do the advertising companies need before I have discussions with them? (Do I need to spend an hour in peak hour counting the traffic that goes by???)
-Is it better to concentrate on working with a smaller local player or a national one with more access to national advertising campaigns?

Have found this association but would welcome further practical comments.
http://www.oaaa.com.au/oaaa/index.htm

Cheers,

Sunstone.

 

[Aceyducey]

Sunstone,

You may need council approvals for this - could be a traffic hazard, particularly if it has a sunscreen ad.

I haven't placed an outdoor ad for about 6 years, but from memory the biggest players have the most reach in terms of relationships with ad agencies & the best systems for managing individual sites.

EDIT: Sorry, just noticed you'd already found the below - but they're still worth contacting:

I suggest you look to the Outdoor Advertising Association of Australia (OOAA: http://www.oaaa.com.au). Their website has a tool to find tell you which companies service your area & type of display & they can provide site advice.

Cheers,

Aceyducey

 

[astroboy]

I like your thinking Sunstone, but would you want to rent a place with a whopping great billboard in the front yard ? I certainly wouldn't but then again I would probably be reluctant to rent in a high traffic volume situation anyway.
Just my thoughts.
astroboy

 

[TheBacon]

I have no idea what the numbers of the IP you are talking about look like. However, say you receive an extra 100/pw from the billboard you may have to discount rent by 50/pw to attract a tenant.

Thats still an extra 50/pw for no extra work.

That said, in a number of areas houses on high traffic roads rent for virtually the same rents as those in cul-de-sacs or quiet streets. You may find the tenants dont care about a billboard if they are already willing to live on a busy corner...

Good Luck

TheBacon

 

[Jas]

Check with council before you go too much further. I investgated this in the ACT (have an IP with a two storey wall next to a main road), and was told that residental places aren't allowed to have billboards on them.

Jas

 

[Jimmyjamjars]

Not really relevant to what you're asking, Sunstone but a mate of mine has an Optus mobile tower on the back of his acreage and for this, Optus pays him $10600.00 dollars per year, with guarantted increases every year, not a bad lurk, aye.
Jim

 

[Sunstone]

Dear guys,

Thanks for the comments.

Aceyducey and Jas-

Yep will definitely need council approval for this. (Yes don't want to cause car accidents with suncreen adverts. ) Have the list of charges for the initial application and the yearly charges. However the charges are very minimal.

With time anything can be approved by council. Maybe the edge needed is how some of this will be going back to help a specific community project.

Astroboy-

but would you want to rent a place with a whopping great billboard in the front yard ?

The billboard would change the property slightly (agreed). However I haven't settled on the property and I have already been approached by three different people each wanting to rent the place. It is in a great location and only 8 minutes walk to the train and 5 minutes to the shopping centre. With this type of demand for renting this property I have already decided to increase the amount of rent that I will charge (Helps fund the provision of more rental accommodation).

The billboards I believe could actually add to the privacy of the IP and perhaps in this light this could possibly be seen positively by council.

TheBacon-

Your logic makes sense. To comment constructively on yields I first need to get information on what sort of advertising dollars can be generated and commission rates.

Aceyducey-

Any ideas of the types of rates that were being charged for a "24 sheet poster" (Yes how long is a piece of string) but any basic ballpark on a weekly or monthly basis could be good????

http://www.oaaa.com.au/oaaa/InsideOutdoor/OutdoorProducts/SheetPosters.jsp

Jimmy,

Agree this is a great idea and thanks for the figures.
(Have a look at this thread )
http://www.somersoft.com/forums/showthread.php?postid=30202#post30202

Cheers,

Sunstone.

 

[astroboy]

Originally posted by Sunstone
Dear guys,
The billboard would change the property slightly (agreed). However I haven't settled on the property and I have already been approached by three different people each wanting to rent the place. It is in a great location and only 8 minutes walk to the train and 5 minutes to the shopping centre.

The billboards I believe could actually add to the privacy of the IP (Yes how long is a piece of string)

Sunstone,
Walking distance to train and shopping centre.... my kind of rental, throw in walk to schools on top and your made in the shade. This type of property will always be in demand for tenants, good on ya.

I thought about the privacy aspect after my post, good point.

How long is a piece of string ? Twice the distance from the middle to one end Cheers.
astroboy

 

[Sunstone]

Dear Astroboy,

Sorry mate couldn't resist. Actually it is easy walking distance to two schools. Another three I'd say are a medium distance walk away. Throw in the medium density zoning and.........

But I've been looking pretty well every day for three months for this one.

Thanks for the tip on the string.

Cheers,

Sunstone.

 

[Aceyducey]

Originally posted by Sunstone
Aceyducey-

Any ideas of the types of rates that were being charged for a "24 sheet poster" (Yes how long is a piece of string) but any basic ballpark on a weekly or monthly basis could be good????

Sorry Sunstone, can't help you here - maybe you should ring up someone & ask for their rates sheets.

Do political parties pay to put up their signs? (probably not) If so, if a billboard isn't possible, maybe a pollie's mug shot is

Cheers,

Aceyducey

 

[Jakk]

G'Day Sunstone,

Is there a maccas further up one of those roads..........

They tend to have large pointer boards around the place with a big arrow and the distance to get there.

e.g. -------------> 1 KM

Don't know if you can approach directly or wether they go through an outdoor advertising company.
With their clout, they seem to get just about anything they want through council

even if they dont pay too much rental, could have yourself eating Big Macs free for the rest of your life

Just a thought

regards

 

[Sunstone]

Dear Jakk,

Thanks for the suggestion. Actually there is a Macca's not too far away. But unfortunately I would not say the position would be ideal to benefit their business.

Certainly the leverage is a good idea although a lifetime supply of Macca's wouldn't extend our life expectancy.

Aceyducey. -Yep will get in contact mate. Mug shots.... We have to be politically correct... :--------)

Cheers,

Sunstone.

 

[BUNDY]

Sunstone,

I know of someone on the Gold Coast who has a commercial investment property who placed a billboard on the roof.

He manages it himself and started off by placing his phone number on the board saying billboard for lease.

From what I remember he gets around 20K per annum. - Could get more, but refuses to advertise certain products.

Very good sideline. Don't worry about lack of customers, if it is a good size board in a great location, they will line up.

Do it!!!!!!

Cheers
BUNDY

 

[Sunstone]

Dear Bundy,

Thanks for the encouragement.

Cheers,

Sunstone.

 

[BUNDY]

Sunstone,

Let us know what you decide and if you go ahead how you fare.

Good Luck
BUNDY