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. Triple net lease investments reduces the work load and risks correlated with these concerns and makes the task simpler for the landlord.
There are a range of lease choices being offered in the marketplace these days. The same as financing, investors sometimes must get imaginative when it comes to leases so that they can maximize their investment or facilitate for a deal to materialize.
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. 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. 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. 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.
If you are an investor, a he triple net lease certainly serves your interest the best. It liberates you from the various expenses that generally have to be taken out of 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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