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.
On top of t he familiar sort of lease you might be aware of such as leasing a vehicle, a house, or an apartment, other types of leases are available in the commercial real estate industry and a lot more advantageous for an investor; these are the net leases.
There are leases such as the triple net (NNN, double net (NN), and single net (N) where the tenant, and not the landlord, has to take care of some or even all of the maintenance expenses. These leases forward the responsibility of paying the property expenditures and rent to the tenant.
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 point out that having this sort of agreement at work will make it hard for them to predict or calculate their charges. Like if they have to pay for repairs along with maintenance, and subsequently their costs might blow up one month. 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.
Tenants covered by the triple net lease will benefit from reduced fixed rents. They will find this situation mostly favorable in 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. It liberates you from the various expenses that generally have to be taken 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.