If you’ve ever considered having a cell tower built on your land, you’ll undoubtedly want to know how much rent you will receive monthly.

While an additional rental stream sounds attractive, lease rates will vary and will be dependent on many factors.

This guide will explain what determines cell tower lease rates along with recommendations if you are considering a cell tower lease buyout.

Cell Tower Lease Rate Factors

Often landowners will compare cell tower lease rates to their homes. Questions like how much the property is worth or the potential rental income they could receive accommodating a tenant.

Unfortunately, a cell tower lease is more complex and comes with a multitude of factors. These include technology, engineering plans and costs, legal issues, wireless carriers who wish to lease, location types and many more.

Commercial Rooftop Cell Sites

If you are a landowner of a commercial building, the best course of action would be to have a ‘rooftop cell’ site.

Sometimes landowners will use the term ‘cell tower’ to describe both raw land sites and rooftop sites. However, they are not the same.

The main difference being rooftop cell sites don’t require an actual cell tower. As a result, this will generally yield a higher revenue stream monthly as cell towers are not necessary for wireless carriers to support their antennas.

Without a cell tower, wireless carriers can cut costs as they do not need to hire workers to maintain the tower.

Due to the work’s hazardous nature, it can prove expensive to hire transmission tower workers to modify and install cell tower equipment. Other cell tower costs are insurance, FAA lighting, liabilities and many more.

Landowners who have rooftop sites will most likely be situated in metropolitan areas as there are many tall buildings for wireless carriers to select from.

Construction for rooftop installations, however, can present a different challenge as heavy equipment can potentially compromise the buildings’ structural integrity.

There are various types of transmission equipment such as transmitter/receivers, base transceiver station (BTS) and GPS and backup power sources.

Drilling and waterproofing can also damage the building, and if done, carelessly could decrease the property’s value. Wireless carriers can, therefore, struggle to obtain jurisdictional zoning approval compared to a raw land site.

Due to these potential obstacles, building owners can earn more by demanding higher monthly rooftop lease rental rates compared to cell tower sites.

Raw Land Sites

Cell towers will primarily be built on raw land sites which landlords own and lease. The size of the area required for these steel structures is usually from 20’x20′ to 40’x40′ square.

The types of towers that are most common are lattice towers, guyed towers, monopoles, and flag poles.

While stealth sites are also included, they are disguised to look like natural structures. These structures would resemble a pine tree, cactus, a giant boulder, etc. which are primarily for visually aesthetic reasons.

In these locations, cell tower rental rates will be worth less than rooftops sites.

The rental difference is due to a smaller population of people living in the area compared to a larger city. With a lower community, there will be fewer vehicles and residents, meaning less demand for cellular coverage from a cell tower.

Another reason why income would be lower is that the cost of building a cell tower exceeds those of a rooftop.

However, there are circumstances where landowners can demand higher amounts of rent, although not as common.

Even if your cell site location is on the outskirts of the city, it really depends on whether or not it’s within proximity to a highly concentrated population.

Highly concentrated areas require cellular networks to provide excellent coverage for its users. If there is a coverage demand near your cell site, this will increase the value of your cell tower location. Landowners can, therefore, demand higher rent from wireless carriers.

Cell sites in metropolitan areas can also process a higher number of calls, handle internet traffic better, and spend less on maintenance compared to rural locations.

For example, landlords can expect to receive monthly revenue from as little as $100 to over $156,000 from established wireless carriers such as Verizon Wireless, Sprint Corporation, T-Mobile US etc.

Regarding specific locations, leases can be worth as much as $4000 per month in rent in downtown Manhattan, NY. While in Boise, Idaho cell sites can only command $1400 per month.

Cell tower lease buyout

If a landowner is currently in a lease contract then there is an option to do a cell tower lease buyout, meaning the lease can be sold.

Cell tower investors who are interested can purchase the lease via a lease assignment or by an easement.

Here are some concerns and recommendations when considering a cell tower lease buyout.

Separate your transactions

If you are planning to sell your property, it is advised to sell your property and the lease under two separate transactions.

Real estate purchasers underestimate the value of your cell tower lease. Be sure to negotiate both individually to maximize profits.

Hire a cell tower lease consultant

Many buyout purchasers will try to close the deal quickly by offering the landowner a lump sum.

While this sounds attractive initially, it would be advised to hire a consultant to ensure you get the best deal possible.

The consultant will facilitate the entire transaction avoiding potential pitfalls which can undermine the value of your buyout lease.

Furthermore, before putting the lease out for the highest bidders, a cell tower consultant will try to increase the current rent to maximize the eventual buyout sale.

A $100 increase on monthly rent may not sound substantial in the short term, but it equates to an $18,000 increase in the lease sale price.