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Billboard Land Appraisal

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Metamorphic

Thread Starter
Senior Member
Joined
Mar 15, 2008
Professional Status
Certified Residential Appraiser
State
California
My supervisor dropped off some paperwork before he left for Christmas break. He said "play around with this, see what you can work up, and we'll work on it when I get back". We've never really done an assignment like this together so I've just been brainstorming on ways to approach the problem.

Its a parcel of land owned by one of my supervisors friends that has a billboard on it. Apparently people keep trying to buy it from the guy and he just "wants to know what its worth". So we're looing for market value for owner's edification.

Looking at the problem, I'd have to say HBU is as a billboard. Its on the growing edge of town, but the site is too small and too steep to have any other use absent some serious grading that would likely require some serious plottage to accomplish.

In looking at ways to approach this I was going to drive along the freeway in the area and try to locate some other billboard sites, figuring I might be able to get some value indicators by sales comparison, although I'd imagine that billboards dont get bought and sold on any kind of regular basis. I figured allocation/cost approach would also be a good way to go for this kind of work (look up pub record data for other billboards, calc a land value and add on a depreciated billboard and electrical supply). Any idea what a billboard costs? I'm sure income method would be the best, but the guy that owns it uses it to advertize his own businesses so there's no income history for the subject, or at least none that's recent.

Any other good ideas on how to aproach this assignment?
 

Walter Kirk

Senior Member
Joined
Jun 24, 2003
Professional Status
Licensed Appraiser
State
New Jersey
If the H&BU is as a billboard the Incime Approach must be given most weight.
 

Kevin A. Spellman

Senior Member
Joined
Aug 30, 2003
Professional Status
Certified Residential Appraiser
State
Massachusetts
In MA the billboards need a state permit also, not just a local municipal permit. Check with the permitting authorities for recent permits for a billboard. Review cell tower feasibility if the site is elevated.
 

RustyLingerfelt

Junior Member
Joined
Oct 13, 2004
Professional Status
Certified General Appraiser
State
Georgia
Look, I have read some of your other post about review work---- now its off to billboards.... does your board members read this forum? I hope not! I guess that is why you don't post by your name

All I can say is---unless you are trained as a commercial appraiser, have read the book on billboard valuation and have been supervised on complex assignments this question is way to early in your education. You have some very big competency errors on the review process and it would seem between you and your mentor that neither understood the overall process of being a review appraiser and now its off to commercial land.

Somehow if you do not understand the process of review work why would you expose yourself to commercial? I just really don't think you would have a hold on DCF's, income and the other aspects of this project. It would be like asking someone who has applied to med school to perform an operation. I say STOP whatever you are doing on this before you learn yourself into a revo license.

Start the new year off clean and not trying to take on more than you understand!

Rusty
 

Vernon Martin

Senior Member
Joined
Jun 8, 2005
Professional Status
Certified General Appraiser
State
California
Metamorphic -- Always check for permits from the local authorities, and if the parcel is on a highway, it also needs a CalTrans permit (check their web site). If it is in a city, there may be a billboard ordinance to get familiar with.

Because good sales data is hard to come by, the income approach would probably be the way to go. For rent comps, look at the billboard advertising rates that the big boys charge for similarly sized signs with similar traffic counts. Clear Channel Outdoor actually lists rates on its web site.

Rusty -- The rules of this forum have been modified to prevent the verbal abuse of trainees. We are all here to learn or to help.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
The rules of this forum have been modified to prevent the verbal abuse of trainees.
Exactly, and nothing in USPAP requires a trainee to start on small houses working their way up to bigger houses, on to the duplex, fourplex, then apartments, then venture into retail, on to industrials, etc.

Yes, there is some books on the subject and you can find some info on line. And yes, it is an income problem but not necessarily a simple income one....It relates to how billboards charge. The traffic count is a big item. AND, ultimately, like so many similar items it is about comparable sales. All three approaches can be used. And it depends upon whether you are appraising the leasehold or the leased fee of the property.
 

Kali the Boston Terrier

Senior Member
Joined
Jul 7, 2003
Professional Status
Certified General Appraiser
State
Michigan
If the H&BU is as a billboard the Incime Approach must be given most weight.

Why is that? What if you had 10 recent sales of billboards and land? What if the current CBS contract is over in 6 months? What if it were cheaper to buy DOT land and construct the sign yourself?

All things I have run across, and although the income approach is the usual approach I go with it...I will never, ever say something is "always" or " must be"
 

RustyLingerfelt

Junior Member
Joined
Oct 13, 2004
Professional Status
Certified General Appraiser
State
Georgia
As stated read a book or two, while no USPAP rules does say you have to start with small homes our state does not allow complex assignments for trainees. The USPAP also requires competency in whatever assignment you take on be it mentor or trainee. My observation leads me in the direction that to continue posting about this issue will only provide someone the chance to apply more demerits to me by private message. Therefore my suggestion is to read the three or four post of all of two lines and good luck while I continue to work on my own education as my email did state that 'no one is born an appraiser" and that statement is true. I have found that working hard, reading lots, a good business education from college did not hurt and common sense go a long way.


Rusty
 
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