A NNN property refers to commercial real estate where the tenant bears mostly all property expenses. The outcome is that the landlord’s income are ‘net’ rents – with no responsibilities and no headaches. With NNN triple net leases, the tenant, not landlord, is responsible for the 3 “nets” – insurance premiums, maintenance and taxes.

As real estate investors approach retirement, there is an active desire to eliminate landlord responsibilities that are a fait accompli in real estate. Triple-net NNN lease properties provide appreciation as well as a guaranteed monthly income. With NNN net leases, rents are simply direct-deposited to your bank account. The following “real” benefits to retiring investors that accrue are:

Corporate Tenants

Many consider NNN properties to be the most secure and marketable real estate investments available – especially properties with solid, credit-worthy tenants. Additionally, many NNN leases are backed by a corporate guarantee. Here the tenant is contractually obligated to pay the lease – even if they decide to close that particular location.

No property management

When you invest in a triple net property, you can step away with ease and not worry about property operations at all. A tenant is able to use anyone they want to manage the property Tenants don’t seek permission from the landlord to come and repair the property should there be a maintenance issue.

1031 Exchanges

If you already own residential real estate, it’s easy to get started with NNN investment property. Using a 1031 exchange, you can sell as many of your properties as you choose, buy NNN triple net lease property, and defer any capital taxes!

Passive cash flow

With triple net properties, the tenant pays nearly all expenses associated with the property – expenses including repairs and maintenance, property insurance, and any other property management expenses. All the investor does is enjoy the rental income deposited into their bank account.

Financing is easy

Investors don’t need excellent credit to qualify for a loan, since lenders look at the strength of the tenant when evaluating a NNN property. So, when a property is occupied by a high-credit tenant, and there is plenty of time left on the lease with low vacancy risk, then lenders will easily approve a loan.

Typically, a NNN property is paid off by the end of the lease term; coupled with appreciation, an investor will own a debt-free, valuable asset.

Certainty of income

Tenants of triple net properties typically sign leases for anywhere from 15 to 25 years. Instead of worrying about how to fill a vacancy, NNN property owners can sit back and know that they’ll receive a certain amount of money each month with regularity.

Even better: most triple net leases include automatic rent increases, which means that not only will your monthly income will increase without you having to do anything at all, but you will continue to build equity over the term of the lease.

 

Invest anywhere

Because net lease NNN properties are mostly management-free, there is no limitation by geography – you can invest anywhere, close or far from home.

Aside from a visit or two to complete due diligence, once a deal is inked, an investor’s only worry is opening the app on his phone to check for the monthly deposit.

Reduced portfolio risk

Triple-net properties can be more sustainable through market cycles because underlying businesses like pharmacy and delivery-oriented and mobile-ready restaurants, are more recession-resistant. Second, integrating triple-net properties into your portfolio helps an investor further diversify, which is essential to reduce market risk.

Liquidity easy to achieve

Triple Net Lease properties appeal to a variety of real estate investors (from individual investors to institutions) and hence, the market for these properties is not “thin” by any means. This means that, when a retiree investor must liquidate a property, there will be a large number of potential buyers.

Simple vehicle for estates

Retirees often choose NNN leases when planning their estate or retirement because of the straight forward nature of NNN lease investments. A retiree can achieve long term, guaranteed, fixed income with rental increases from a simple product and most of all, heirs will have minimal complications associated with wealth and trust management.