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Big Sign, Big Money? Pros and Cons of Having a Billboard on Your Self-Storage Property

All self-storage operators want good visibility for their facility, as it helps them be found by potential and existing tenants. But it’s also a real advantage if you’re interested in grabbing revenue through billboard installation and rental. Here’s an owner’s take on this potential profit center, including pros and cons.

Tim Davis

February 11, 2023

4 Min Read
Pros and Cons of Having a Billboard on Your Self-Storage Property

If you own a self-storage facility with high visibility or one that’s nicely positioned along a busy road, you may be curious about using a rentable billboard as a revenue stream for your business. Advertising companies are constantly looking for places to erect these large signs and are willing to lease land from you to do so. Not only will they install the billboard and maintain it, they’ll write a nice check to you each year for the privilege.

In my company’s case, we purchased a self-storage facility on the edge of town that came with four billboards. Whether or not we wanted them, these structures came with an active lease, and we had to honor it. The signs are positioned at each corner of the facility along the highway. In general, the advertising has been for politicians, hotels, restaurants and other businesses.

There have been pros and cons to these installations. If you’re considering billboards for your own property, consider the following before pursuing this avenue of income.

Pros

The primary advantage of having a billboard erected on your self-storage site is the added revenue generated. It costs the billboard company money to install, permit and maintain their signs, so they’ll typically want you to sign a long-term lease to guarantee they’ll have many years of revenue generation ahead.

The payout can vary greatly by location, visibility and traffic count. Our billboards generate $3,000 per year over the course of a 20-year lease, but I’ve seen others capture $12,000 to $18,000 per year. At those rates, having a billboard on your property could be a welcome addition! You won’t know your earning potential unless you contact your local advertising company to come out and assess your site. If you choose to do so, don’t be afraid to negotiate the price.

Additional exposure is another potential benefit, though more difficult to quantify. It may be possible to advertise your own business on the billboard if the advertising company agrees to it and it’s allowable under your city or state ordinances. In our case, we aren’t to take advantage of the space due to business-signage restrictions, but we still gain passive exposure since people can’t help but notice the self-storage facility when they look at these large signs.

Cons

One of the drawbacks of having a billboard on your property is potential disruption to your self-storage operation. You have to grant access for the installation. The support apparatus requires excavation, trenching and concrete work. The company we lease with also needs monthly access for maintenance and to change the signage.

If your facility has an access gate, you’ll need to provide the billboard company with a code. Also, be prepared to field calls from new technicians who arrive on site but have no idea what the code is.

Also, keep in mind that you and members of the community may not like what’s being advertised. I’ve seen billboards for politicians, gun companies, medical treatments and other divisive topics sitting above our self-storage facility. The messaging could annoy or offend customers even though you have nothing to do with the sign content.

Finally, some people don’t like billboards at all and view them as a blight on the local landscape. This is especially true in areas viewed as an entrance or gateway to the town. Because of its size, a billboard may also detract from your own advertising since it may be 10 times larger than your facility sign.

Weigh Your Options

If you have room on your self-storage property for a billboard and the extra income sounds inviting, the best thing to do is have your local advertising company perform an assessment to see if an installation will ultimately be worth your while. We recently received an estimate for one of our other facilities along the interstate. Unfortunately, the sign company offered only half of what we’re getting with our current lease. It’s difficult to know whether this was just a low offer or a market adjustment due to the explosion of websites and online marketing infringing on the effectiveness of billboards. Either way, it doesn’t look like a deal we’ll pursue.

As to our current experience, I’m just waiting for the day that another self-storage business places a billboard ad above ours. We have seven years to go on the lease we inherited. After performing our own assessment, we don’t plan to renew. For $3,000 per year, we’d rather have open air and a clear view of our own signage.

Tim Davis is owner, manager, handyman and janitor of American Storage in Helena, Montana. The company operates three facilities in the area that offer more than 1,050 units. For more information, visit www.americanstoragemt.com.

About the Author(s)

Tim Davis

Owner, American Storage

Tim Davis is owner, manager, handyman and janitor of American Storage in Helena, Montana. The company operates three facilities in the area that offer more than 1,050 units. For more information, visit www.americanstoragemt.com.

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