Triple Net Lease – Maximizing A Landlord’s Investment
Several real estate investors have been detained by the usual concerns of owning a property like expanding occupancy, handling expenses, and all the other related headaches. A triple net lease investment minimizes the work as well the risks associated with every one of these concerns and simplifies the landlord’s job.
There are a range of lease choices being offered in the marketplace these days. Similar to financing, sometimes investor need to be resourceful with their leases in order to make the most of their investment or even cause a deal to happen.
Besides the usual lease type that you perhaps know from leasing a house to an apartment and a car, there is a variety of leases which are normal and from which a commercial real estate investor can enjoy more benefits, and these are referred to as net leases.
There is the triple net (NNN) lease, double net (NN) lease, and single net (N) lease that forwards some or every variable and fixed expense of keeping up the property to the tenant, in place of the landlord. These leases forward the responsibility of paying the property expenditures and rent to the tenant.
The single net leases insure that the lessee pays the taxes on real estate on top of the rent. With double net leases, the tenant must pay not only the rent and taxes but the insurance as well. Such magical present granted by the lease fairy makes tenants pay for rents, taxes, insurance, as well maintenance. Having this agreement on board relieves the investor of his/her obligation to pay for each and every expenses that normally come with ownership.
Some tenants might not like the concept of a triple net lease. Many argue that with such an agreement, they might find it difficult to calculate or foresee their expenses. For instance, if they are bound to spend for repairs as well as maintenance, their costs could then swell one month. Contrary to regular leases where tenants will know their fixed rental amount they have to pay at all times, the triple net lease exposes them to costs that are inconsistent and which they are unlikely able to calculate. However, such triple net lease investment does not benefit investors alone.
A triple net investment can be beneficial to tenants in the form of lower permanent rents. This situation is well-suited for tenants of new buildings. In a recently constructed building, they will be able to benefit from the cheaper rent plus the diminished fees for repair and maintenance, being that the building is new.
Naturally, the triple net lease is most favorable for you as an investor. You are able to break free from the many expenses which usually have to paid for out of your income. On top of the monetary burden, investors are relieved of the responsibility of having to worry about how to cover these costs, pay for bills, and others.
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