One of the best ways to invest in real estate is by buying triple net lease (NNN) properties. And, among the most reliable tenants in this arena is O’Reilly Auto Parts. In fact, the company is considered a top NNN tenant, alongside other reputable businesses, like 7-Eleven, Walgreens, CVS, and DaVita, with an excellent credit rating, stable cash flow, and quality operations.
So, if you are a new investor or one who wants to grow your portfolio, O’Reilly Auto Parts triple net leases are definitely great investment opportunities to take. Let this article serve as your guide.
About O’Reilly Auto Parts
Founded in 1957, O’Reilly Auto Parts is a Fortune 500 company and the largest auto parts retailer in the US, offering replacement parts, accessories, batteries, and oil for domestic and imported cars and light trucks.
From its humble beginnings, the company is now operating more than 5,000 stores in 47 states.
Why Invest in O’Reilly Auto Parts Triple Net Leases?
There are many reasons why you should invest in O’Reilly Auto Parts triple net leases. Here are just some of them.
O’Reilly is an ever-growing company, with plans to open more stores in the coming years. This rapid expansion will only continue to make their properties even more valuable for investors.
When you invest in their stores, you can feel confident knowing that your investment is safe and has a good chance of increasing in value over time.
Stable Cash Flow
One of the best things about NNN O’Reilly Auto Parts properties is that they have stable cash flows. This means you can rely on rental payments to come in on time, every time.
This stability is one of the reasons why O’Reilly is such a desirable tenant for landlords and investors alike. It’s a company you can trust to make your investment work for you.
Fewer Landlord Responsibilities
When you invest in NNN properties, you don’t have to worry about things like maintenance and repairs. That’s the responsibility of the tenant, which can save you a lot of time and money.
This is one of the key benefits of investing in O’Reilly stores—there’s less hassle for you as the investor.
Long-Term Passive Income
O’Reilly Auto Parts NNN properties provide stable and long-term passive income. This is an important factor to consider when looking for real estate investments. You want something that will provide consistent returns, without too much hassle on your part. The O’Reilly business definitely fits that bill.
Important Factors to Consider When Buying an O’Reilly Franchise
While an O’Reilly Auto Parts franchise is a great investment in itself, it is still important to remember that not all of their stores are created equal. So, you should do your due diligence in selecting a property that will give you the highest possible returns on your investment. Here is a checklist that you can use during your search.
- Cap Rate
- The Property’s Condition
- Lease Term and Renewal Options
- The Competition
As with most investment properties, the O’Reilly Auto Parts store that you buy should be in a good location. It should be in a busy area with high traffic and a lot of potential customers.
As a business selling auto parts, it should be near anchor establishments, such as automobile repair shops or service bays. This will help to bring in more business.
The capitalization rate (cap rate) is a measure that indicates how much return you can expect on your investment. Generally speaking, you want to find an O’Reilly Auto Parts store franchise with a cap rate of at least six percent or higher. Anything lower than that may not be worth your time and money.
To calculate the cap rate of an existing property, you can use the following formula:
Net Operating Income (NOI) / Purchase Price = Cap Rate
So, for example, if the NOI is $12,000 and the purchase price is $200,000, then the cap rate would be six percent (12,000 / 200,000 = .06).
The Property’s Condition
When you’re looking at an O’Reilly Auto Parts store to buy, it’s important to inspect the property and make sure that it is in good condition. This means checking for things, like structural damage, water damage, and mold.
You don’t want to have to spend a lot of money on repairs after you’ve purchased the property. So, make sure that it is in good shape before making any offers.
Lease Term and Renewal Options
Typically, you would want a property that is under a long lease term so that you can enjoy stable and consistent rent payments for many years to come. O’Reilly Auto Parts stores usually have lease terms of around 15 years or more.
However, it’s important to make sure that there are renewal options in the lease agreement. This way, if the tenant decides to leave the property before the end of the lease term, you can still renew the lease with another party.
When looking at an O’Reilly Auto Parts store to buy, it’s important to take into account the competition in the area. You don’t want to invest in a property only to find out that there are several other auto parts stores nearby that are competing for business.
So, do your research and see how strong the competition is before proceeding with the purchase.
Finding the Best O’Reilly Auto Parts Properties for Sale
The best way to find O’Reilly Auto Parts stores to buy is by working with a reputable real estate broker that specializes in NNN properties, such as the one here: https://www.buynnnproperties.com/oreilly-auto-parts/. With them, you can rest assured that you’ll have access to the best and most up-to-date listings of O’Reilly properties today.
Not only that they can help you find the best properties for your specific needs and goals, but they can also assist you in negotiating the best deal possible on them.
So, if you’re looking for this type of investment, be sure to work with a good broker. It will make the process much smoother and less stressful for you.
Without a doubt, investing in O’Reilly Auto Parts triple net leases is a good way to build wealth and ultimately attain financial freedom through real estate. However, as with any investment, there are some things that you need to take into account before making any offers.
With the tips mentioned in this article, you can start on the right foot and make sure that your investment is a wise and profitable one.
For more useful tips on real estate and business, feel free to check out the other posts on our website!