Nowadays, telecommunications companies are looking for land wherein to build and maintain cell sites for their networks while property owners welcome their presence on their assets. Both parties obviously benefit from the arrangement the telecommunications company avoid the hassles of property ownership while still enjoying the benefits of cell sites in strategic locations and the property owner earn passive income in the form of rent income.
What happens then when selling land with cell tower lease is on the property owners agenda? Lets look at a few possible solutions and considerations in the selling price of the transaction.
Possible Solutions for Selling
Keep in mind that as a property owner, it is well within your right to set boundaries, specify provisions, and otherwise dispose of your real asset in legal ways. This applies to your desire of selling land with cell tower lease attached to it.
You have several possible solutions but these have their share of pros and cons. Be sure to consult with your accountant and lawyer about the financial (i.e., tax, profits) and legal considerations of the sale should it become a reality.
- Subdivide the land
This is the easiest and simplest method of selling land with cell tower lease – you will only be selling the parts of the property to buyers except for the portion with an existing lease contract with the telecommunications company. Your buyers can then choose which of the subdivided parts are the most suitable for their needs and wants in the property.
But there are challenges, too. For example, if the leased land and its access route are located in the main access route, your buyers may have second thoughts (i.e., access rights can be a thorny issue in the future). Your will want to hire an experienced professional to subdivide the land in a way that will make the properties more attractive to buyers.
- Reserve the right to collect rent
As the property owner of the leased land, you have the right to reserve certain rights to yourself. One such right in relation to selling land with cell tower lease is reserving the right for rent collection on the leased land.
Basically, you will sell the land in part or in whole to the buyer, thus, transferring its ownership. You will, however, still claim the rent income paid by the telecommunications company on the leased part of the property.
The challenge: Finding buyers that will accept the condition considering that they will be losing out on a lucrative deal in the process.
- Sell, lease and sublease
The premise is simple: You sell the entire property to the buyer with the provision that you will lease the part of the land where the cell tower rests on including its access route. Your next step then is to sublease the land to the telecommunications company, which means you will still keep the income. You will, however, pay the new owner with rent in return.
The challenge: Getting a lower price on the lease from the new owner to make a profit on the sublease with the telecommunications company. Plus, you may have to settle for a lower selling price on the property considering the sublease arrangement.
The bottom line: You can profit from selling land with cell tower lease but be sure to carefully think about your options.
Factors Affecting Selling Price
When selling your property with a cell tower lease, be sure to set realistic expectations about the selling price. Think of these factors:
- Average selling rate and lease rate in the region
- Topography of the land
- Accessibility, infrastructure and construction feasibility of the property
- Size of the land and its proximity to other desirable locations (i.e., urban areas)
In the end, you are well advised to ask for professional assistance when selling land with cell tower lease to get the best benefits from the transactions.