This post needs to be run every couple years.  Repeat after me:

Billboards are not passive income.

Billboards are not passive income.

Billboards are not passive income.

There is a myth that you can make lots of money in the billboard business without any work.  Type “billboard investing” into youtube and see for yourself.   Insider gets calls from investors who want passive income by buying billboards.  They have no out of home experience.  They don’t expect to work full-time.  The billboards are thousands of miles away.  They often want a loan with no money down.  Here’s what Insider tells them.

If you want passive income, buy Lamar Advertising stock.  It’s got a 3% dividend and the dividend will probably be raised later this year.  Lamar stock has appreciated 8%/year over the past 25 years and 13%/year over the past 10 years.

Insider can’t think of a successful investor who got into the business for passive income.  There’s nothing passive about owning billboards.  Billboards do not run themselves.  They don’t sell themselves.  They don’t maintain themselves.  Permits and leases don’t renew automatically.  Good sites don’t appear out of nowhere.   If you’re not prepared to do the hard work, don’t enter the business.  If you don’t have an experienced manager to run the billboards and sell ad space don’t enter the business.  Almost every troubled out of home company Insider has encountered during the past 5 years has been a new entrant or a passive income investor who didn’t know what they were buying or didn’t know how to run what they bought.

And if you decide to enter the business, try to buy or build  a couple hours drive from your house.  One of John Arnold’s four rules for outdoor operators is “Never build a board more than 100 miles from your house because it will always be the farthest board away which needs the most maintenance.”

What do you think?  Email billboardinsider@gmail.com or use the form below.

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