NNN leasehold properties or triple net lease properties are highly desirable commercial real estate. The typical NNN lease tenant only gets the right to use the property until the lease term expires instead of taking title to the property(net real estate taxes, net real estate taxes, NNN property broker). Here are some associated details:
The Lease Term: once the lease term expires, the leased property then reverts back to its owner. As the name suggests, a NNN leasehold property (NNN lease tenant) grants ownership of the real estate for the length of the lease, which could range between 1 – 99 years. The tenant essentially acts as the surrogate owner within the lease term.
Tenant’s responsibilities: in addition to paying rent, the tenant also pays the net real estate taxes, property insurance and the structural maintenance costs of the common area of the property.
Maintenance: this may include repairing the floorboards and plasterworks, repairing the roof, clearing the parking lot, solving plumbing issues and other problems within the four walls of the structure. The tenant needs to look after everything and so, the owner does not have to worry at all about property management.
Here are some benefits of a NNN property investment:
- Payment flexibility: investors can receive rent in lump sum, annually, or monthly, in installments;
- Property ownership and control: the lease governs the investor-tenant relationship and usually favors control by the investor such that the tenants bears all operating and capital costs for the lease term, whilst paying rent for use of the property;
- Passive management: the investor is free from day to day property management and can be remotely located, even in another country!
Before investing in triple net lease NNN properties, remember these caveats:
- Tenants, Lease terms and Market Conditions: choose properties where tenants have good credit ratings, have signed long-term leases and, population demographics and market conditions are favorable;
- Due diligence: contrast and compare different net lease NNN property investments to understand the reasons risks and returns vary before selecting an investment property;
- Work with a NNN property broker: An expert real estate agent holds deep knowledge of NNN properties. Having completed hundreds of transactions, gives an agent a broad ranging scope on property investing that is hard to beat.
To get better insight into leasehold NNN properties, contact your expert real estate specialists at Triple Net Investment Group today
