Triple Net Properties 2017: Passive Income Real Estate Investment
A triple net lease pertains to a type of leasing agreement that is designating the lesser as the one solely responsible to pay all related costs of the asset being leased which is additional to the rental fee applied under the lease. The triple net lease expenses are categorized into “three nets” which include property taxes, maintenance, and insurance. Triple net lease is also referred to as net-net-net (NNN) lease which pertains to net real estate taxes, net common area maintenance, and net building insurance. In net lease, there are standard names in the commercial real estate which include single net lease, double net lease, triple net lease, bondable lease, and ground lease.
Triple net leased properties have become increasingly popular for those investors who are looking for a steady income with a relatively lower risks as compared to other forms of investments. When it comes to triple net lease investments, they are generally offered as a portfolio of real estate properties consist of three or more high-grade commercial properties, wherein a single tenant lease it with an existing in-place cash flow. The different commercial properties may include shopping malls, office buildings, free-standing buildings operated by restaurant chains or banks, or industrial parks, with a lease term of ten to fifteen years. Triple net investments help investors gain long-term and stable income with capital appreciation of the property. Investing in a triple net property enables leasing the property to a quality tenant, freedom from management responsibilities, with attractive financing, stable cash flow, and unique tax benefits which only real estate provides. Triple net investments appeal to part-time investors who are looking for guaranteed income without management responsibilities, and it serve an attractive exit strategy for those with portfolios that are mature.
Like any other investment, there are a lot of factors you need to consider when structuring and valuing the deal. it is crucial to assess the quality or health of your tenant’s business, making sure that the tenant is capable of sustaining his business, with financial strength and capability. When it comes to evaluating your tenant, the different criteria you need to consider may include the operational margin, debt to equity ratios, a number of stores, the stability of management, and the outlook for the industry sector. You’re essentially providing a real estate capital to the business when you are leasing your property, and the success has a direct bearing on the long-term success of your triple net investment. You may contact us by checking our details in our website’s homepage if you are looking for triple net investment.
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