There are several reasons why property owners consider a cell tower lease buyout. The most common reason is that they want to raise a lump sum of cash to meet emergency requirements. They may need to pay medical expenses, put a down payment on a house, pay for their children’s college tuition, or fund their retirement. Others use the lump sum raised from the buyout to invest in real estate or expand their business.
If you’re considering selling your cell phone tower lease to an interested party, you might be having second thoughts. We’ve helped property owners make a smart choice by analyzing the pros and cons of a buyout. To help you, we’ve compiled a list of the top four factors before selling your cell tower lease.
1. Do You Require Immediate Cash, or Do You Prefer Long-Term Value?
When you agree to a cell phone tower lease buyout, you typically receive a lump-sum payment in cash. However, you will no longer receive rental income from the property. You must decide whether you prefer long-term value or immediate cash. If you’re facing a financial situation where you need quick cash, then selling your cell tower lease might be the better choice.
2. The Tenant Has the Right to Terminate the Lease Agreement with 30 Days’ Notice
There is no guarantee that the cell tower company will continue honoring the lease agreement in the coming years. While it’s unlikely that cellular companies will cancel their lease agreements overnight, there is a possibility that it might happen soon. We’ve seen plenty of situations where carriers decommissioned entire networks.
Remember that cell tower income is not a lifelong guaranteed source of income. If you would rather avoid the risk, it’s better to consider selling the lease now and receive the settlement in cash. Remember the adage, a bird in the hand is worth two in the bush. Selling your lease is a bird in the hand, and you’re guaranteed a lump sum immediately.
3. Cell Towers Might Become Obsolete in a Decade or Two
Technology changes quickly. While analysts predict that cell towers will be around for the next five to ten years, no one can guarantee that cell towers will be around for decades. New disruptive technology could do away with the need for large cell towers. Remember the old phone booths at every corner? When cellular phones became mainstream, these booths were obsolete within a few years.
Qualcomm is working on a technology that would allow mobile phones to communicate directly with each other without the need for cell phone towers. The takeaway is that your rental income’s long-term future is not guaranteed. So, it might make sense to make a significant cash out when you can.
4. You Might Relocate
The US Census Bureau states that only 37% of Americans live in their homes for more than ten years. Who knows what the future holds for you? If that were the case, you wouldn’t receive the full potential from your cell phone tower lease agreement. If you are considering a move, it makes sense to sell the lease agreement right away to make the most of it.
A cell tower lease buyout might be the better choice for you financially. Analyze the pros and cons of the situation and ensure that you’re not leaving any money on the table by not seizing the opportunity for a lucrative buyout.