Mobile phone tower rental rates are hard to understand. And the major reason for this lack of clarity is there isn’t a lot of public information on the matter. If you’re a landowner and are considering renting your property out to a mobile phone service provider, the following information shall help you determine if you’re getting a handsome deal.
Cell Carrier Agent
For fresh mobile phone tower installations, the cell carrier appoints agents to secure them low rental deals. And for every low rental rate procured, the agent receives a commission or bonus from the carrier. The point being if an agent comes up with an offer, you should know that there’s good scope to increase the rent. So don’t hesitate to put forward your quote.
Middle Management
The agent either reports to a project manager of the firm he is directly employed to or a middle manager who works for the cell carrier. Middle managers tend to differ across the board in terms of personality and approach. Some would want to procure deals for the lowest rates possible, and then there are quite a few who would be more reasonable and resort to fair market deals. Be aware of this when negotiating.
Uniqueness of the Property
The location and dynamics of the property dictate rental figures. For instance, a rooftop site would fetch a higher rent than a site that’s located much closer to the ground and surrounded by other buildings. A tower lease expert would invariably inspect your property and determine the best rent for your site. Generally, the rates go up if the number of blockages such as buildings surrounding the area decrease.
Capital Improvement Expenses
Expenses weigh in significantly in any development project. The cell phone firm could right away set up the antennas or they may have to build a multi-foot faux tower for hiding antennas. Understanding construction expenses the carrier incurs would truly provide you some leverage during negotiations. In case the company has a construction budget, it could afford to be a bit more flexible with rent.
Rent Escalator
Once you’ve determined the right rent rate, it’s now time to take the future into consideration. In other words, if you do not have a rent escalator in place, inflation would catch up over the years and eat into your profits. At the moment, most carriers are setting up discussions with a 7 to 10 percent term escalator – the term being five years. Unfortunately, this rate is unlikely to outpace inflation. Therefore, do your math or get an economist on-board to ascertain an escalation rate that would be beneficial to you in the long run.
