A gas station is a type of triple net lease investment opportunity that offers recession-proof products. With about 25,000 gas stations across the US, Shell oil NNN properties provide investors with the opportunity to purchase assets with product offerings and strong brand recognition.
Usually, Shell’s oil sign 15 to 20 years NNN net lease. The yearly increase in rent price is between one to three percent, or eight to 15 percent increment in five years. Thus, investing in Shell gas stations NNN is a profitable investment since there’s room for accelerated depreciation.
Is Shell Gas Stations NNN a Good Investment?
There are several reasons to consider investing in Shell gas station for sale. The top reason is that gas is a recession-proof product; thus, irrespective of the country’s economy, people need gas to commute to several places and carry goods to several states.
Also, like other NNN leases, Shell gas station for lease are amongst the top ways to earn passive income. Investors may give minimal management to the property while the tenant pays for building insurance, property taxes, and maintenance costs.
Also, notwithstanding your location, you can easily invest in a gas station from anywhere in the country. Furthermore, gas stations can withstand economic turmoil and are necessary for consumers when in a good location. If you seek to buy a Shell gas station, there are some things to evaluate before concluding your purchase.
Factors to Consider When Buying a Gas Station
Purchasing an NNN Shell gas real estate is a great investment opportunity since Americans highly depend on their vehicles which require gas and fuel. Here are some factors to consider to inform your decision-making:
1. Location
Location is a significant factor to take into consideration when purchasing a gas station. The drive-by traffic of an area dramatically affects gas sales.
In other words, the closer a gas station is to a major roadway or a highway, the greater the drive-by traffic. Also, a gas station near a shopping center, a park, or a large entertainment facility is beneficial.
When searching for a Shell gas station, learn about the area it is located and check if there’s easy access to the station from both directions. Also, check if there are road constructions in the area or other potential threats.
2. Convenience Store
Although you’re purchasing a gas station, it’s necessary to consider a convenience store in the station. You’ll make money from the convenience store in addition to sales from the gas station.
Also, the convenience store will attract potential customers to your gas station. Therefore, pay special attention to the overall look and condition of the convenience store. Furthermore, check the supply chain feasibility and the vendors to ensure there’s no inventory management problem in the convenience store.
3. Storage Tanks and Fuel Equipment
Storage tanks and fuel equipment are critical assets that will have a positive or negative impact on your business’s profitability and daily operations. When buying a gas station, it must have a leak detection system, durable storage tanks, and other essential fuel station equipment.
A fuel station with worn-out equipment and machinery will not make for a profitable investment since you’ll need to make a replacement in the long run. Furthermore, you might want to make some upgrades in the future so inspect the fuel station for things like dispensers, new canopies, POS- terminal, fuel management system, and nozzles.
4. Safety
Safety is another factor to consider since gas stations are vulnerable to robberies. Thus, talk to local police officers about the area’s safety and check police records.
Depending on the location’s safety, you may have to install security alarms and probably employ a night security guard. Furthermore, ensure sufficient lighting, security cameras, and windows to scare criminals from the gas station even though the area appears safe.
5. The Brand
Shell is among the major oil company brands. An advantage of investing in a branded station is that it provides training, advertising, and support by promoting its brand. Also, the brand comes with standard practices to uphold the quality and image that comes with the name. Investors will significantly benefit from Shell’s name recognition if they follow the brand’s rules.
Furthermore, Shell gas stations NNN offer branded gift and consumer cards that save money on credit card fees. It’s therefore vital to invest in Shell’s gas station since consumers value name brands.
6. Environmental History of the Station
It’s paramount to consider the history of the environment the station is located in. Examine the area for the potential existence of contamination since environmental concerns will demand expensive remediation.
Therefore, when purchasing a gas station, some essential things to access include state-specific laws regarding gas stations, double-lined tanks, and an environmental site assessment result. Double-walled tanks will prevent ecological problems.
7. Competition and Demographics
Another factor to consider when purchasing a gas station is the competition and demographics. Perform research on the location’s demographics by finding out how many people live in that area and their ages and how many customers buy from the station.
Are they commuters, local customers, or both? What are the station’s customers buying? This evaluation will aid in knowing the customer’s primary demand from your station.
Also, make findings on the gas stations located in the area and check if there’s little or no competition. If there’s much competition on the site, you should draw a plan to run the business.
Conclusion
Shell gas stations NNN is a wise investment option for investors seeking to diversify their investment portfolio and generate passive income.
The reasons gas stations are a popular investment include an increase in gasoline sales in the US, easy operation of the business, and gas station flexibility which allows it to open other businesses like convenience stores and repair shops to generate more income.
Also, gas stations don’t require any special skills. Lastly, when buying a gas station, it’s paramount to consider its location, safety, storage tanks, and fuel equipment condition, among others.
