How to Determine the Value of your Billboard Lease Agreement

Published: 19th June 2009
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If you have a billboard lease agreement, it doesn't necessarily mean that you know its value. It can be difficult to determine the proper billboard price for your agreement. How do you determine the value of a lease agreement?

There are many things that affect the cost of your lease.

The size of your billboard is one obvious factor in determining its worth. Also, there is different value for a one sided billboard and a two sided billboard. Your billboard may be at street level and eye-level with traffic, or it could be on the roof of a building. Also, a billboard may have a higher value at a specific intersection. Billboards that are not located at intersections may be worth less, but a billboard on a busy highway may be much more valuable.

Also, you may want to take a look around for other billboards that are near your own. Is your area highly saturated with other billboards? Your billboard may not have the same worth.

Because there are so many factors at play in determining the worth of your billboard, there are three basic methods that may help your evaluation. These are the income, sales comparison, and replacement cost strategies.

The sales comparison strategy uses the best known sales price of the billboard to determine the worth of the billboard lease agreement. As billboards are often sold in bulk, it can be difficult to determine worth based on sales price.

The income strategy incorporates the cost of rent and income for the billboard. It is a comparison of the outgoing and incoming funds as a result of the advertising structure.

Finally, billboards can be appraised using a third method. In this, the replacement cost strategy, value is assessed by treating the structure as personal property. This method avoids market complications and can help to standardize billboard prices.

Regardless of your strategy, it is important to determine the value of your billboard. You may find that it is more profitable and safer to sell your billboard lease agreement for one lump sum.

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