The question of how much to charge a telecommunications company for a lease to enable it to construct a cellphone tower on land that you own is a difficult question to answer. Lease rates can vary by thousands of dollars per month, and they depend upon several factors.

Key Takeaways

  • Lease rates vary by thousands of dollars per month. A professional from a consulting firm can provide the best information in this regard.
  • The factors that determine a lease rate include the location of the site, its elevation, the distance to other towers, whether there is a dense population or busy traffic nearby, and the local zoning ordinances.
  • If a company leases land, they may sublease the use of their towers to other providers. In this case, the lease should contain a clause stating that the landowner will receive a percentage of the proceeds.

Understanding Lease Rates for Cellphone Towers

The best advice for determining a proper lease rate is to contact a professional to assist you in determining the value of your land as a cell tower lease site. A local professional will be able to tell you how much a telecommunications company is likely to be willing to pay for a lease.

The rapid, ongoing expansion of cellphone service has increased the need for towers to provide adequate coverage. This increasing demand for space for towers by telecommunications companies has made the leasing of land or rooftop space on either private or commercial property big business. There are consulting firms that specialize in advising real estate owners in this regard. Additionally, there are attorneys with substantial experience in putting together this type of land lease contract.

Some of the primary factors that influence whether a carrier will lease your land and how much you can receive are below.

Location

As in most real estate transactions, location is a major factor influencing price. If you live in a sparsely populated rural area, there are many similar landowners with whom the telecommunications company can negotiate. Thus, the lease rate you can get will be considerably lower than the rate you would receive if your property is in, or near, a major metropolitan area.

Elevation

Cell towers operate most efficiently at high elevations—so much so that, in urban locations, telecom companies have even arranged rooftop leases with churches with highly elevated rooftops. If you happen to own land on top of a high mountain, this can command a premium.

Distance to Adjacent Towers

If there are other cell phone towers within one mile of your property, it is unlikely that a telecommunications company will build another nearby. Local zoning jurisdictions require exiting towers to be used first. However, if no towers are close by, the chances are higher that you could lease your land.

Dense Population or High Traffic Counts

If your land is near an urban or suburban population with busy roads, the chances are higher that your property may be leased. If your property is in a rural area and over half a mile away from major towns or highways, it is unlikely that a telecommunications company will lease your property.

Zoning

Counties, towns, and cities have zoning ordinances that permit communication towers. If your land is industrial but surrounded by residential property, a wireless carrier may want to lease your property.

Similarly, the likelihood that a carrier will use your land is less if it is residentially zoned and surrounded by industrial property. Your local zoning or community development office can tell you if your land meets the requirements for a communications tower.

Special Considerations

Telecommunications companies often sublease the use of their towers to other providers. In this case, a clause in the lease should state that you will be paid a percentage (10% to 30%) of any such arrangement.