The value of something is more than just a monetary figure; it is its worth and importance to you. Think of what you could do if you received a substantial lump-sum of money. If you own a small business, could you use the money to expand and increase your revenue? If you run a non-profit, how many more people in the community could you reach? If you are retired, how would your quality of life and of those you love improve?
Whether you seek the advice of a professional or rely on your own experience, there are countless ways that you can invest your money to give you a return significantly greater than the amount of periodic mast rent you might receive from your mobile phone mast lease agreement.
Furthermore, just as you know your business, we know ours. Just as you might turn to an estate agent to help you buy or sell your home, it makes sense to lean on the expertise of seasoned telecoms industry professionals to maximise the value of your phone mast site lease. Whether it is providing the correct market value for your mobile phone mast lease premium or renegotiating an expiring mast site lease, you can financially benefit from our deep market knowledge and long-term partnership with you.
BASELINE: INVEST YOUR CURRENT RENT
Let’s take a look at some various investment scenarios comparing typical mast rent to some alternatives available with a mobile phone mast lease premium.
To establish a baseline example, say you receive £10,000 per year and your rent increases 15% every five years. If you were to invest your entire rent cheque every year at a healthy 6% rate of return, and you think there is only a 5% chance your lease agreement might be terminated in any given year, your invested rent stream might look like this over time.
ALTERNATIVE: PURCHASE AN INVESTMENT PROPERTY
Now let’s assume you receive a lease premium amount of £90,000 and are then able to purchase a £450,000 investment property with a 20% deposit and a 5% interest rate mortgage. You would now have a tangible asset with equity that is no longer subject to any kind of “termination”.
Furthermore, if we assume a realistic investment return (RPI Rate) of 7%, an annual increase in property value of 5%, property taxes of 2%, and that the property rent is increased 3% every year, your invested mobile phone mast lease premium could look something like this over time.
ALTERNATIVE: INVEST IN YOUR BUSINESS
If you own a business or want to start one, there are countless ways you can use a mobile phone mast lease premium of £90,000 to help it grow. It could be leveraged to secure a small business loan, hire an additional employee, increase marketing efforts, upgrade back-office systems, open a new location, you name it. You are in charge and know how it could be used best.
If you achieve a 10% return by investing in your business, this is the impact your lump-sum payment could have over time.
ALTERNATIVE: DEBT REDUCTION
Whether it’s a personal loan, credit cards, or an equity line of credit, paying off debt can not only be a huge emotional relief, but also one of the most impactful ways of using your £90,000 payment. Let’s assume you have borrowed money from various sources with a blended 8% interest rate.
This chart illustrates how much money you would save over time by using your mobile phone mast lease premium to reduce your debt.
ALTERNATIVE: INVEST FOR RETIREMENT
Many landlords are counting on their phone mast rent to cover expenses in their retirement years. Not only is this an extremely risky approach considering the very real possibility that the mast site can be terminated or the rent is reduced, but there are other established retirement strategies that can bring a greater and much safer return.
Let’s say that by working with a financial planner you are able to put your mobile phone mast lease premium to work gaining a 6%. This is how a well-managed investment plan might compare over time.
The information provided is intended for illustrative purposes only and does not constitute investment advice. It is also not an offer to invest or to provide management services. The information is subject to correction, completion and amendment without notice. You should always consult with your own investment, accounting, legal and tax advisers to evaluate independently the risks, consequences and suitability of any investments you might make.