When you need cell tower leases, there are many different options. They include- Cell Tower Lease Buyouts, Rent-outs, and Cash Leases. Each option has different advantages and disadvantages. Learn about each type of lease purchase and how they can benefit you.
Cell Tower Lease Buyout
A cash-out cell tower lease buyout involves a company paying a property owner a multiple of their monthly rent for the right to future rent revenue. Since most owners aren’t nearly as savvy as the top corporations concerning cell tower technologies, mobile phone companies, and mobile service providers, they’re usually at a significant disadvantage when negotiating lease contracts. This is because they’re not able to dictate terms to the property owner. Therefore, this method can often be very beneficial for both the landlord and the tenant. If the property owner is having a hard time paying their current rent amount, they can use this method to receive a nice chunk of change from a tenant. Landlords can also save money in the long run because the amount they pay in upfront fees is tax-deductible.
Drawback
The biggest downfall to cash out cell tower lease buyouts is that the process is often unprofitable for the landowner. Most buyers are only interested in buying one or two towers, limiting the choices the owner has to choose from. Therefore, these purchases will usually be unsuccessful.
On the flip side, many property owners who are in desperate need of money will jump at the opportunity to buy out their towers. These individuals will pay an asking price that is far below the fair market value of their structure. In the end, they’ll find that the lease-purchase offers aren’t very beneficial, and in most cases, it’s going to be a financial loss for the landlord.
The Application of Lease
There is one situation in which these types of leases are ideal. If a person is in immediate need of additional cell sites and is prepared to move immediately, then these types of leases are perfect for them. The lease-purchase agreement is generally the same as any other residential lease, except that the amount received is significantly less than what would be received if a person was purchasing individual towers. In this situation, there is no need for an inspection or bidding process. The seller simply needs to make the final purchase, and that is that.
At the end, when all is said and done, Cell Tower Lease Buyouts is very beneficial to both the buyer and the tower owner. The buyer gets to purchase property without having to put up the necessary financing, and the tower owner gets to keep his or her existing real property. However, the terms and agreements between the buyer and the tower owner will vary depending on the specific contract between the two.
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