Make the Most of Commercial Real Estate by Investing in the Triple Net Lease
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. Triple net lease investments reduces the work load and risks correlated with these concerns and makes the task simpler for the landlord.
Today, there is an array of lease opportunities that the marketplace has to offer. As with financing, investors likewise have to use their imagination occasionally, so as to take full advantage of their investments or even bring about a deal.
Aside from the regular kind of lease, you are probably familiar with such as leasing a car, a home or an apartment, there other types of leases that apply to commercial real estate and additionally beneficial to investors, which are termed net leases.
These are the NNN or triple net, NN or double net, and N or single net leases that transfer a few or all of the changeable as well as fixed expenses for the maintenance of the property to the lessee instead of the landlord. Under such leases, the tenant is duty-bound to pay property taxes along with the rent.
With single net leases, the tenant has to pay for the property taxes over and above their rent. Double net leases pass to the tenant the burden of paying the taxes as well with insurance on top of the rent. 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. Such as their costs might become a lot bigger one month if they are in charge of the maintenance and repairs. Unlike the usual leases where tenants will always know fixed amount of rent payments, the triple net lease exposes them to inconsistent costs that they may be unable to foresee. On the other hand, the triple net lease is not only beneficial to the investor.
A triple net investment can be beneficial to tenants in the form of lower permanent rents. They will find this situation mostly favorable in new buildings. Not only will they enjoy lower rent in new buildings but they will also be spending less for repairs and maintenance because of its age.
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.