First, in light of the challenging real estate environment, prices for the real estate are at some of the lowest levels in recent history. Also, interest rates are low, and lenders are looking for strong cash flow business models. Gas stations in particular generate significant cash flow which can help finance the purchase. In addition, with most municipalities cutting back on the approval of new stations, the land value of a limited number of locations increases.
Second, the retail side of the gas station business is another great revenue generator, especially for items like great coffee and homemade baked goods. It’s important to make sure that you carry and offer something unique to your station only.
Thirdly, both the state and federal governments are funding and financing the conversion of conventional fueling stations to alternative fuels. Seriously, what could be better than being paid to improve the environment and increase the value of your investment by utilizing someone elses funding mechanism to do so?
In the next blog I will go into each one of these in greater detail and watch for the pitfalls in running a stations in future posting.