Triple Net Lease is also referred to as NNN leases which give the tenant responsibility to cater to three more payments on top of the monthly rent. In this type of lease, the tenant should pay for the property insurance, maintenance of the building, and property taxes.
This type of landlord and tenant agreement has benefits to both of them. The rent of the property will remain low in this lease type, unlike in gross leases in which the rental rates are high. This is a benefit that the tenant enjoys.
Low rents attract tenants to a building. This means that the landlord will not likely have a vacancy. This is a plus for the landlord since the building may always be occupied.
You should invest in triple net lease property even if it is your first time in real estate. It is one of the best investment opportunities where you can earn a lot of bucks passively for many years. Keep reading this article to learn more about triple net lease property and why they are the right investment opportunity for you.
Does Triple Net Lease Favor Investors?
As an investor, you will not be involved in the daily management of the property. This is because the tenant takes care of the property management roles. As such, the property becomes a stable real estate investment for the long term. In most cases, this type of lease is offered to credit-worthy tenants who have corporate guarantees.
Thus, the investor will always get the rent on time. It offers a low-risk investment that favors the investor. Besides, the tenant will lease the home for a long period that lasts for 15 to 20 years of stable cash flow. There are also options for a rent increase to cushion inflation. This means that the investor can enjoy a reliable rental income for the agreed term.
Who can help you with Triple net lease services?
There are many experts out there who can stand with you throughout the entire process. Investing in triple net lease properties should be easy if you work with experts. Thus, consider getting expert advice and working with professionals with experience, knowledge, and a good track record in triple net lease properties.
Why do you need to choose NNN leases on your property?
You may not have much understanding of real estate leases. However, you can always involve experts to advise you on the perfect approach as an investor. This section reveals the various perks of Triple Net Lease. Thus, as an investor, you will leverage the following as you earn passive income for a period that may not last less than 15 years.
- Stable cash flow
Every investor likes to earn a stable income without so much involvement. This passive income idea can earn you so much even with little involvement. Note that most of the leases last for at least ten or fifteen years. This means that you will get your dues for the agreed time without fail.
You will not need to market your property every year. In addition, you will have all the time to engage in other business ventures that require your direct involvement whilst you earn stable cash flow from your property. Your building will also not remain vacant for months.
- Low-entry price point
Single-tenant properties are always affordable compared to other property types. This means that you can buy a property for a certain amount of bucks, find a tenant, and start receiving stable cash flow right away. You will start getting instant returns from the amount invested in the property and still enjoy minimal property management. Thus, the triple net lease is ideal for venturing into the real estate market.
- Minimal management
Property management is one of the major tasks that takes much time and resources. Thus, as an investor, you should choose the lease type that alleviates management roles from your shoulder.
The NNN lease allows investors to earn monthly rent without direct involvement in property management. Note that the tenant will be handling the property taxes, property maintenance, and property insurance. The landlord does not have much to do in this type of agreement.
As an investor, you can choose to employ the NNN lease for your property to enjoy this benefit. You will only be expected to do the bookkeeping, choose when to refinance the property, and handle tax returns. Isn’t this a good idea for landlords who have other important business duties to take care of? Truly it is, and you should choose it. You will have all the time to run your business and spend time with your family.
- More financing options
Most real estate loans are written against the property value. However, single-tenant properties are quite different when it comes to financing options. Note that the single-tenant property enjoys back up from both the tenant’s credit and the property value. Thus, the investor has more options available for financing.
Can the tenant negotiate for better terms?
The triple net lease may sound more favorable to the investor. However, the tenant can still negotiate for more favorable terms. For example, the tenant can use the base rental amount as an item of negotiation for better terms bearing in mind that the tenant takes the landlord’s risks.
Conclusion
The triple net lease offers more than you think. As you can see, the investor will not get involved in property management. Thus, this is a nice idea if you would not want to be directly involved in the daily management activities. As the investor, you can run other businesses while you earn passively from your property. If you are not well-versed in this area, you can always engage experts. It would help if you did not navigate the lease realm alone when you can get expert advice from top real estate professionals who have been handling lease matters for decades.
