While cell tower lease is a great way to earn significant side-income for landowners, they come with their set of advantages and disadvantages. For example, once you give your property to a cell tower company, the contract will usually last several years. This is both good and bad.
Tower Genius, a premium cell tower consultation company has shared the most obvious pros and cons of cell tower leases below with a good look at cell tower leasing rates in 2020.
Pros of Cell Tower Leases
- Before we get into the disadvantages of a cell tower lease, let’s have a look at the obvious advantages.
Significant Side Income
- The most obvious benefit of having a cell tower lease is the additional revenue you’ll generate by leasing your unused land whether its residential, commercial, or industrial in nature.
An average cell tower lease will generate anything from $900 – $1,000 per month depending on how good you negotiate. This rent gradually increases by 2-3 percent every year, adding more to your yearly revenue.
- With an average cell tower lease contract lasting 25-40 years, you could be making $650,000 for the complete term of the contract.
No Maintenance Required
- One of the biggest advantages of leasing your land to a cell tower company is that you will never have to worry about maintenance costs. Space will be used by the company and it is up to them to maintain it.
So you’ll never have to worry about repairs, upgrading the property or spending any money on it as long as the lease remains.
Maximum Use of the Space
- As a landowner, you also have the option of leasing your rooftop for cell tower antennas. This is particularly a good option for landowners who have properties with empty rooftops. With this, you will be able to make maximum use of the space available to you.
A cell tower company requires about 50 -150 square feet of space on the top of your property and the rates are almost similar to the full site being offered.
Cons of Cell Tower Leases
- There are many benefits of renting your property to a cell tower company, but there are also a few things that may restrict you. Here are the disadvantages.
Very Long Term Commitment
- As mentioned earlier, a tower lease contract can last up to 30 years and can go as far as 100 years. Moreover, you will not be able to terminate the agreement unless the tenant broke the lease terms or failed to pay you the rent.
As a result, you’ll be stuck with the company for a very long time to come and you won’t be able to use your property for anything else.
- While you will not have to worry about maintenance costs, there are still tax liabilities that can occur later in the contract. These future tax assessments can be put on by a municipality and you should be ready for it.
Moreover, a rise in insurance cost of the land is also possible during the term since you allowed the construction of a tower on the property. This is why when you sign a contract, make sure these additional expenses are also covered by the cell tower company.
- Do not sign an agreement with a cell tower leasing company without knowing the full terms of the contract. There are many things to consider and you could end up getting into trouble down the line if you didn’t read the terms thoroughly.
You will also have to negotiate for the cell tower leasing rate which is determined using various factors. If you’re not sure what your property is worth, contact Tower Genius today and let us help you find the true value of your land and the rate you should be getting.