My Father Has Cell Tower On His Property....

Warden of the Northeast

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Which will be my property someday, he's 77. They signed a 44 year lease with him at $1,200 per month and he receives 3% on top of that each year for cost of living increase. My question is what would be a fair amount to be given for a buyout? American Towers has only offered him like 240k. Myself personally would never aagree to a buyout as that leaves tons of money out on the table. But until he passes it's his decision to make. He's currently about 9 years into the 44 year lease.
 
Urblock

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I hope your Dad gets another 15 or more. Do you want to live in that house? If not rent it and make that place your cash cow for years. Trying to not be a dick
 
Warden of the Northeast

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Urblock said:
I hope your Dad gets another 15 or more. Do you want to live in that house? If not rent it and make that place your cash cow for years. Trying to not be a dick
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Thanks, I hope I get him for many more years too. I'm going to build a house on the property, his house is a mess. I'm better off building new.
 
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One point to consider is the income tax on the revenue. Dont know your age, but if the revenue will generate in your retirement might want to consider the difference of tax rate of revenue while you are also getting a normal income versus lower retirement income.
 
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Omeletpants said:
One point to consider is the income tax on the revenue. Dont know your age, but if the revenue will generate in your retirement might want to consider the difference of tax rate of revenue while you are also getting a normal income versus lower retirement income.
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I'm 43. Sorry for being obtuse but I don't really understand what you're meaning.
 
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Warden of the Northeast said:
I'm 43. Sorry for being obtuse but I don't really understand what you're meaning.
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Your income tax rate is likely to be much lower when you retire than it is now. So, getting income then versus now means you pay less taxes. That would be the difference between a 35% rate versus a 15% rate. Also, taking a lump sum paymnt now would definitely trigger the 35% or possibly the 39% rate
 
Warden of the Northeast

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Omeletpants said:
Your income tax rate is likely to be much lower when you retire than it is now. So, getting income then versus now means you pay less taxes. That would be the difference between a 35% rate versus a 15% rate. Also, taking a lump sum paymnt now would definitely trigger the 35% or possibly the 39% rate
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Oh I understand, thanks! Yeah if it's up to me we're going to play out the full length of the lease. I couldn't imagine gIving up hundreds of thousands of dollars just to cash in now. BTW, we're you able to crunch numbers for me?
 
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Someone I know has a property with a tower on it was offered 750000 he is holding out for a mil. But his is a big industrial property and he also is getting more per month. He also has the cell company bidding against someone that wants to grow med marijuana in there talk about hitting the lottery lol
 
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BEARZOMBIE said:
Someone I know has a property with a tower on it was offered 750000 he is holding out for a mil. But his is a big industrial property and he also is getting more per month. He also has the cell company bidding against someone that wants to grow med marijuana in there talk about hitting the lottery lol
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Yeah he hit the jackpot. If you don't mind me asking how much does he get per month?
 
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Warden of the Northeast said:
Oh I understand, thanks! Yeah if it's up to me we're going to play out the full length of the lease. I couldn't imagine gIving up hundreds of thousands of dollars just to cash in now. BTW, we're you able to crunch numbers for me?
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Talk to your cpa if you take that money and reinvest in let's say a shopping center the tax hit isn't as bad as you might think. But if you are taking the money just sticking it in the bank you will be in the highest tax bracket
 
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Consider the tax ramifications of selling it, but also consider the time value of money, what could that 240 turn into with 35 years of time to grow it...

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Warden of the Northeast

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Can someone give me the formula to figure out the full realized income from the tower lease? 1,200 per month, 44 year lease, 3% increase every year after the first year.
 
Ares

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Do not cash out.... ffs...

Only reason to cash out and take 240k and pay a big tax bill on it would be if you had a sure thing investment to throw the cashout money at....

Ya know like buying a bar or a Blockbuster Video.... :troll:
 

AussieBear

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sell it.. smoke the profits.. buy hookers.. go on vaykay.... whatever... extra... free money.. you in yo 40s.. aint living forever.. have fun

unless u aint making it as is... if dat be the case... buy a rv and park it under the tower.. and juss live there for the next 40 or so... if you got that many years left..

i could live well off of 1200 a month with a mortgage of zero.. my mortgage is zero now, so i knows what mes is talking about..
 
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Warden of the Northeast said:
Can someone give me the formula to figure out the full realized income from the tower lease? 1,200 per month, 44 year lease, 3% increase every year after the first year.
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I think you can just use a savings calculator...

http://www.calculator.net/savings-calculator.html?cstartingprinciple=0&cannualaddition=0&cannualadditionyears=0&cannualadditionincrease=3&cmonthlyaddition=1200&cmonthlyadditionmonths=528&cmonthlyadditionincrease=3&cadditionat1=beginning&cinterestrate=0&ccompound=annually&cyears=44&ctaxtrate=0&cinflationrate=3&printit=0&x=86&y=24

EDIT: I did it with no interest at all, but obviously if you just kept dropping the 1200 into a savings account of some kind it would rack up interest as well.
 
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