Investors in the United States are always looking for profitable and low-risk investments. While numerous alternatives are bound to crop up, one venture that’s increasingly gaining popularity amongst new and seasoned investors is gas stations.
Although several factors like road construction and increased gasoline prices might make business falter a bit, taking the path of an NNN lease when you’ve successfully purchased a good gas station for sale is bound to yield positives.
First off, gas stations are recession-proof investments. With gasoline cars still very much in vogue in the United States, gas demand is on an all-time high, and it’s showing no signs of slowing down anytime soon. Although renewable energy sources will be the future, considering the “NOW” is necessary.
For context on how profitable the petroleum industry can get, 2020 saw gasoline stations in the US make over $430 billion in sales. Here, it’s pertinent to note that compared to 2019, these figures were lesser due to the COVID-19 pandemic.
Despite the significant decline, the market is coming back up as things gradually return to normalcy. So, if you’re an investor looking for something profitable and low-risk, now’s the time to secure that new or old gas station for sale.
This article will give some insight into NNN leases, why they are ideal, and factors to consider when choosing a gas station for sale. Without further ado, let’s take a PEEK.
While you might have some insight about single and double net leases, the triple net lease (also tagged NNNs) is becoming reputable amongst investors. Why? Let’s find out.
With regular properties, landlords are in charge of maintenance, paying taxes, and settling any issue that crops up within that property. However, in an NNN lease, “landlord” responsibilities are shouldered by the tenant or lessee.
Here, besides paying rent, the tenant is liable to pay taxes, settle maintenance bills and miscellaneous charges during an active NNN lease.
With NNNs, all the investor needs to do is purchase a property, refurbish it to meet the specifications of prospective tenants, and enter into a contract with a lessee. Since leases can span up to 25 years, you’re sure of a steady income in the form of rent payments.
You don’t have to be on your property 24/7 to dictate proceedings, as the bulk of management lies with the lessee. Although this advantage is worth noting, let’s look at other reasons why NNNs are ideal investment forms.
Why Are NNN Properties Ideal Investments?
Gas stations make excellent NNN properties. For context, here are reasons why investing in one is instrumental to fostering positive tidings in the long run. Notable perks include:
1. Minimal Management
Unlike regular real estate, NNN property owners don’t have to work on their structures as the lease agreement makes the tenant responsible for everything, including rent payments.
Due to the simplicity involved, landlords don’t have to saddle themselves with numerous responsibilities, resulting in ample free time. With this flexibility at the fore, investors are now purchasing NNN properties over the country.
2. Long-term Tenancy
NNN leases are often attached to reliable brands known for their excellent credit. Thus, these entities are more than likely to seek long-term occupancy when they enter a lease agreement.
Depending on the tenant, landlords could enter leases spanning 10 to 20 years. This advantage provides a degree of certainty as landlords and investors are sure of receiving rent payments for an extended period without worrying about re-leasing.
3. Unimpeded Passive Income
When you acquire a gas station for sale, and you put it up for an NNN lease, you’re guaranteed steady passive income once you’ve entered a contractual agreement with a tenant.
Here, receiving rent payments is a certainty during an active lease. With a property manager in the mix to send payments across, you’ll have very little to do with that NNN structure. Now, making profits without doing anything too stringent is FEASIBLE.
Vital Considerations to Make Before Purchasing a Gas Station
While we’ve taken a look at the pros attached to NNN leases, you’ll need to pick the right gas station for sale to enjoy these benefits. When looking for a gas station, consider the following factors:
● Gas Station Form
With gas stations, there are two primary forms: unbranded and franchised. Most investors don’t lean towards one as they both have advantages and disadvantages.
While franchise owners can use a reputable brand’s naming, they’ll have to follow their varying restrictions. Also, franchised stations must make their purchases (fuel and other products) from the franchisor.
On the flip side, unbranded gas stations grant you the luxury of doing what you want without reservations. However, unlike franchised stations, you’ll have to build your brand from scratch.
Here, evaluate your options carefully and see what variation tallies with your investment plans. That way, you can run a profitable enterprise in the long run.
● Convenience Store Attachment
Although you might be investing in a gas station to make gasoline sales only, securing one that has a convenience store attached is excellent. Why? While people fill up their tanks, they can head into the store to purchase a quick snack and other items. Therefore, bolstering profit margins is a certainty.
So, if you’re searching listings for a viable location, a gas station with property for sale should be up for consideration.
● Conditions of Tanks and Pumps
Whether you want to invest in a new or abandoned gas station for sale, it’s essential to consider the conditions of the gas tanks and pumps. When there’s something wrong with these critical assets, things can take a downward turn.
Consequently, before you sign those contract papers, check those pumps and tanks to ensure everything works as intended. While you might need to mend some aspects, ascertain their costs to avoid spending the bulk of your investment on repairs.
● The Competition & Demographics
Investors understand that business is all about competition. However, knowing what entities you’re up against is vital.
While seeking insight from the seller is great, you must do the legwork yourself to get abreast of the facts. You can take a drive and see what gasoline stations are available alongside their offerings.
Additionally, taking a closer look at their clientele is important. Are they locals or commuters? What do they purchase during a regular stop? Getting answers to these queries is vital to ascertain an investment’s feasibility.
Purchasing NNN properties in the shape of gas stations is crucial in fostering unfettered passive income and improving profit margins. However, it’s essential to make several considerations before you make that acquisition.
When you’ve gotten this aspect all sorted, it’s time to take a look at relevant gas station listings for a variation that can bring your investment goals to life. While a Google query in the lines of “gas stations near me” is bound to work the trick, visiting buynnnproperties for a more comprehensive insight is crucial.
With the versatility attached to the real estate market, now’s the time to make a CLAIM!