Published On: Tue, Nov 17th, 2015

Four Things You Need to Understand as a Cell Tower Lease Holder

As a property owner, the chance to lease some of your land in a cell tower lease could be extremely advantageous. Unfortunately, too many land owners are making costly mistakes simply because they don’t know the ins and outs of the market. For example, extending the terms of your lease might sound like a good way to continue earning that consistent rent. In reality, the result of extending can actually mean a loss of money. When the lease comes up for renewal, you have the chance to earn bonus money as companies woo you for permission to put their towers up.

Understand the Motivations of the Cell Tower Companies

When reviewing tips to maximize your cell phone rent, keep in mind the reasons that telecommunications companies are willing to pay such high rates to place cell towers on your land. It costs the company large chunks of money to move from one site to another. When forced to find another site, they might then face the risk of not finding an acceptable replacement site. Once you have established a relationship with a cell phone business, you might find that second, third, and fourth companies are also interested in renting that space – so that they can avoid the hassle of searching for their own tower space.

Understand the Value of Your Land

When those companies are looking for a new site to place the cell tower, the desirability of your land is probably the most important thing to be considered. How badly does the cell phone company want to set up the lease? If you are in a position of owning the right piece of land, then you could be getting rental money that far exceeds the first offer the company makes. Just be careful not to lose their interest by expecting too much money. If your neighbor has land and is willing to settle for a lower price, then the company may take their lease in that direction. You’ll need to carefully balance the risks between not getting enough money through the lease and losing the deal altogether.

Understand the Fine Print

Carefully read through all of the paperwork presented to you. Some lease amendments may include provisions that prevent you for selling or leasing your property, or will at least seriously reduce the sale price of the main piece of land. Watch out for any wording that allows the company to sublease the tower. These subleases could mean valuable rental money in your pocket rather than theirs.

Understand the Value of a Professional on Your Team

Consider the value of working with experienced professionals. Did you know that a yearly increase of just 1 percent could significantly increase the amount of rent you realize? Did you know that the cell phone tower company prefers that you don’t know how they work out the lease rates?  This is because it gives them the chance to pay you much less than you could certainly be earning. Cell tower leasing experts will take a look at the company’s “search ring” and consider the fair market value of your ground in terms of the cell phone tower lease. Paying close attention to rates and terms, these professionals could mean the difference between earning just enough and actually making enough money to be truly comfortable.