Presently, investors are rushing to buy NNN properties that promise to generate robust returns, regardless of market conditions. There are many benefits to investing in a triple net lease, including earning passive income.
However, before buying a triple net lease property, ensure it can comfortably compete with e-commerce stores seeing as more consumers prefer buying things online presently. One major retail property that fits these prerequisites is the AutoZone NNN for sale.
Auto part stores like AutoZone keep experiencing consistent growth because most vehicle owners in the US prefer repairing their old cars to buying new ones due to the cost of purchasing new vehicles.
As a new investor that seeks to diversify their portfolio, you might be wondering the requirements for investing in AutoZone real estate for sale. Finding a great investment is often tricky. Thus, you’d need to understand the lease and how to acquire the best auto parts NNN properties.
Here’s everything you need to know about buying AutoZone real estate for sale or other triple net investments.
AutoZone is an international auto repair store founded in 1979, with 584 stores abroad and 5,885 domestic stores.
AutoZone provides formal training programs and on-the-job training to ensure their employees offer customers solutions, advice, and recommendations. They have three product categories: discretionary, maintenance, and failure.
AutoZone is a great net lease tenant due to its online-resistant nature and investor-friendly leases. More so, its high technical proficiency required for buying auto parts makes AutoZone a bit insulated from online competition.
AutoZone auto parts feature a mixture of ground and double net leases, drastically changing the property’s cap rate. These leases leave the investor with various levels of responsibility because they feature investment-grade guarantees.
AutoZone locations are carefully chosen in areas with a high number of old vehicles. Thus, the high maintenance rate will prove advantageous for potential AutoZone owners, ensuring more profitability.
The Basics of AutoZone NNN Investing
AutoZone ground lease for sale and other auto parts sales are great NNN investments; however, there are some investment basics you need to know, including the lease length, business type, and location.
Although the triple net investment industry has few restrictive regulations and a low entry barrier, regardless of all these, there are high competition levels, making it challenging for new investors to succeed.
The following are some factors to consider when trying to invest in AutoZone real estate for sale.
Select a Location
Picking the perfect location for your auto parts store is crucial for your business’ viability. One significant metric for deciding the location’s quality is the saturation of automobile parts stores around your prospective business area.
Thus, you’ll need to research your potential buyers’ nature and their purchasing power. You can check your town’s zoning commission for the store location’s latest mapping information.
Ideally, the best location for an auto parts store like AutoZone is the main road to make its sign visible. Nevertheless, if the store is located on a side street, near an intersection or the main road, consider using its signage to direct customers from the main road to your business front door.
Also, ensure your business location has enough space around the property to make sure large delivery trucks can easily come in and unload parts shipment.
Purchasing an Existing Store
Suppose you wish to buy an auto parts store for sale; it’d be best to buy an already existing property. That way, you can purchase a well-known store with additional features.
The seller might willingly finance the sale even at low interest if you have an excellent credit history. One benefit of purchasing an auto parts store with a running lease is that you won’t have to handle the building’s management.
Auto Parts NNN Leases
Under NNN leases, property owners prefer renters that won’t default on their lease regardless of the economic situation. Triple net tenants are responsible for handling the costs, rent utilities, building insurance, most common area, structural expenses, and property taxes.
AutoZone leasing, like other auto parts store leases, runs for 20 years and is either triple net or sometimes double net with five-year renewal options. However, some auto parts businesses lease for ten years. AutoZone escalation clauses come with a one to ten percent annual bump.
Generally, NNN leases are financially beneficial for both the tenant and landlord. With triple net investments, tenants know their rent for the entire lease duration.
A triple net lease is also beneficial for tenants seeing as it helps them pay a lower rental amount despite handling the operating costs. However, it’d be best if they include these operational costs into their business expenses and plan the property repairs and maintenance around their schedule.
More importantly, renters can create a huge business presence and customer base, knowing that they’ll be in a specific location for a long while. That way, the knowledge will help the company become settled in the community.
On the other hand, triple net leases are advantageous to the landlord because they offer them the opportunity to focus on other worthwhile ventures. Due to the few expenses, they also enjoy consistent cash flow from these investments.
Choosing the Best Triple Net Lease Auto Parts Store
AutoZone and other similar auto parts stores are great investment opportunities for investors interested in NNN real estate. Once you’ve decided to buy auto parts real estate, start researching available properties through online listing platforms.
Auto parts retail stores like AutoZone have many properties across the country. Before proceeding to buy an AutoZone real estate for sale, you’ll need to consider some factors like whether it’ll be a viable option in smaller towns.
While smaller communities might support an owner-operator store, they might be too small for AutoZone stores. AutoZone is a top auto parts retailer with 5,885 stores nationwide.
You probably have come across the term triple net or NNN leases and want to know the best NNN investments to start your journey with; auto parts retail stores like AutoZone are one of the best triple net properties to buy.
However, before moving to purchase one of the available AutoZone properties for sale, you need to know the requirements. We’ve discussed it in detail, and hopefully, you can make the right decision from the information here.
Suppose you’ll need an extra hand to make the right investment decision; contact Buy NNN Properties today and speak with one of our professional advisors to help you decide on the AutoZone real estate to buy depending on your budget and location preference.