In the real estate market, we are often told that location is everything when it comes to business. When considering buying this type of business, you need to understand the factors that make a location profitable for a gas station or convenience store. Is it next to a busy highway, next to a shopping mall, or somewhere else?

When evaluating the best location for you, remember that you already have part of the answer before you even begin. Unless you’re moving, you’ll need to find the best station near your current home or within a short travel distance. Don’t be tempted to think you may be an “absentee landlord” as gas stations and convenience stores are not ideal for this approach.

To ensure that you have a successful business on your hands, you need to be close to the facility to keep an eye on what is going on. Profits are likely to drop if the business is not well managed and you need to be a hands-on operator to multiply your chances of success. If your station isn’t performing at its best, don’t be surprised if you don’t get the results you want.

Important considerations when looking for a location:

Everyone’s definition of the perfect gas station location would be next to a major interstate highway with quick on-ramp and off-ramp access. Such a location could only be a source of income for its owners. While this is largely true, keep in mind that major oil companies are also aware of this and already own or lease most major locations. It is not impossible, but it will be very difficult to find and buy an independent station here.

While a mall or shopping center is theoretically a prime location, there are drawbacks. Certainly a large volume of business is possible, but in general, the land adjacent to the shopping center belongs to the company that owns the shopping center and is rented under strict conditions. Also, 24/7 access may not be convenient. No doubt the company will have a clause in the contract that allows them to expand and replace their station with a different type of tenant, such as a restaurant chain. Also keep in mind that if a big box store comes along, they may have their own gas station and this can really hurt your profits. If you think this location is the right one, chances are other motivated entrepreneurs will think so too and try to move their station to the location as well.

If you’re willing to exploit the “convenience store” nature of the business, you may want to look downtown or other “diamond in the rough” locations. In suburban neighborhoods, you can set up a big business by taking advantage of the need for people to come in and buy items on their way home from work, for example. A smaller gas station and convenience store in such a location can be an excellent option, as this type of business almost never occurs in a station next to a main road or in a shopping mall. Chances are a station in one of these neighborhoods will be more competitively priced, if you start on a tight budget.

When selecting the location, consider whether the general area is growing. If you can see new hospitals or new businesses opening, that’s a positive sign.

Make sure you shop in the best area possible, as your gas station or convenience store will only be profitable if you’ve chosen the right location.