Triple Net Lease – Maximizing A Landlord’s Investment
Maximizing occupancy, taking care of expenses, and seeing to all the problems of property ownership are only some of the common landlord issues that real estate investors have been so involved with. With triple net lease investments, the job and risks related to all of these matters are reduced to a minimum and being a landlord becomes a lot easier.
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.
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. With these leases, it is the tenant who should be making property payments aside from the rent.
With single net leases, the tenant has to pay for the property taxes over and above their 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. Such as their costs might become a lot bigger one month if they are in charge of the maintenance and repairs. 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. But then, the NNN investment actually benefits not just the investor.
Tenants covered by the triple net lease will benefit from reduced fixed rents. This situation is well-suited for tenants of new buildings. There, they will get to enjoy the reduced rent along with little maintenance as well repair costs because of the age of the building.
If you are an investor, a he triple net lease certainly serves your interest the best. It relieves you of the many charges that otherwise have to be compensated from your income. Other than these, investors are likewise able to break free from the worries of covering these expenses, paying the fees, etc.
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