The opportunity to lease a gas station is a significant investment. However, it requires critical analysis and thinking. After all, it is just like purchasing a gas station; the only difference is the payment method.
Having a gas station all at your hand requires you to put as much effort as possible to ensure it runs well. But then you must make the right decision before signing an agreement with gas stations for rent & lease. The following are seven factors to consider when renting a gas station. Read to the end!
7 Things to Consider When Renting a Gas Station
- Is the Station Franchise or Independent
Generally, there are two types of filling stations: franchised and independent. A franchised filling station is run according to rules and agreements between the franchisor and a national supplier selling branded fuel such as Exxon Mobil or Sunoco.
While the lessor wholly owns an independent filling station. These stations sell unbranded gas they’re getting from different suppliers. They don’t get any assistance from natural suppliers.
Each of these types of stations has its pros and cons that you’ve to look into before leasing. A franchised gas station has the pros of carrying a popular brand name, trademarks, and trade design canopies. These will make it more likely to catch eyes and get customers easily. An independent station, on the other hand, doesn’t enjoy these benefits.
An advantage of an independent station is that you’ll operate it with your own rules and style, while in a franchised station, you’ve to follow the rules and agreements laid down by your franchisor even if you’re not okay with them.
If you’re renting an independent station, sit with experts and lay down rules that will govern the station. On the other hand, if you’re hiring a franchised station, ensure you’ve adequate information about the terms of rebates, gas sale quota, and additional necessary information.
Both franchised and independent stations are suitable forms of investment, and you can also find NNN lease gas station properties for rent near you.
- Check the Location
When getting a gas station for lease, you must check the location and its traffic as it determines how much you’ll succeed in your investment.
If it’s in urban areas, don’t choose a busy intersection as your station won’t be easily accessible to customers; instead, opt for highway exits.
In non-urban areas, consider a densely populated community so that when gas product users type ‘commercial gas station near me’, your gas station will pop up on search engines.
It’s also essential to know the local rules of the area as they’ll significantly impact your business.
- How Much Competition Is There?
No competition is as bad as too much competition. While staying in an area with too much competition can hurt your business and stop you from making enough sales, no competitor may indicate a location isn’t a commercial place. Therefore, look into an area’s demographics to know the number of people residing there, their ages, jobs, and earnings.
Also, consult the local permitting department to see if any competitor has built or is planning to build a gas station near your own. Make sure you look into these factors before paying for a gas station for lease.
If you’re ready to undertake the venture, consider checking for ‘gas stations for lease near me’ on Google to find available properties for rent, or contact an experienced local real estate agent to help you find the best gas station for lease at the best price.
- Keep in Mind the Safety of the Area
Gas stations are very prone to robberies. Therefore it’s best to own a gas station close to the police officers or in a safe area.
Even with that, put on sufficient lights, security guards, and security cameras to chase away criminals.
- Look for a Gas Station With a Convenience Store
Most NNN gas stations for sale have a convenience store in them. The reason is that despite gas sales being the primary business of a station, convenience stores can be a supplement source of income.
You’re getting a gas station for lease to sell gas, but do you know that the gas market sometimes goes down? That’s where convenience stores come into play. By providing other products besides gas, you’ll be able to make more profit, and even if the market is operating on a slim margin, you have a side source of income.
However, some gas lessors keep the convenience store for themselves, so you’ll only be getting your revenue from the gas sales. The choice is yours here, whether you’re okay to operate a standalone gas station or you’d like to get one with a convenience store, but it’d be best to go for the latter.
- Is the Station Profitable?
A good question to ask yourself before renting a gas station is ‘how profitable is the station? Get a professional accountant to look into the records, accounts, and customer count of the station. Check if the supply contract of the station is transferable and whether the facilities and equipment are in good condition.
If the gas tanks, pumps, or dispensers are old, consider talking to your lessor to look into getting new ones. Also, check the terms and conditions of the contract thoroughly before signing.
- Environmental Contamination History
Make sure you know the environmental history a gas station offers before agreeing to hire it. Consider going for stations that aren’t guilty of any environmental contamination in the past.
Also, talk to your landlord about which party will account for environmental responsibilities. If it’s your lessor, make sure you discuss with them the importance of addressing those issues as early as possible.
However, if your agreement says you’ll be in charge of environmental responsibilities, meet experts to know the potential threat of contamination and other issues before signing. Know that repair of environmental contamination costs a lot, and check if you’re ready to cater for that.
Conclusion
Hiring a gas station requires thorough analysis and considerations to avoid making wrong decisions. Consider choosing an exceptionally constructed gas station with reconditioned equipment to avoid spending much on upgrades.
These seven factors will come in handy if you’re considering starting a gas station business and would want to rent a station rather than buy one. Good luck with your new venture!
