Triple Net Getaway: How to Be Successful in Net-leased Investments

Today, most investors are still not that equipped with in-depth knowledge about the triple net lease. Many are also confused and overwhelmed about making smart investments. It helps to know the things that are common among successful triple net lease. Triple net lease passes many responsibilities and expenses to tenants including insurance, maintenance, and lease period. When it comes to insurance, the tenant is responsible to maintain necessary property insurance for the real estate. The tenant is also responsible for maintenance and repair costs in a triple net lease agreement. The lease period of a triple net lease is long-term.

The nnn investor relinquishes the maintenance and insurance control, so it is important that tenants are aware and understand the insurance coverage needed for the property, as well as the maintenance costs. It is best to deal with a shrewd business owner or business man with plenty of capital available to better deal with expenses. Triple net leases are complex arrangements between the tenant and the investor that's why a short-term lease of 1 to 2 years is not practical and doesn't make sense for either party. NNN leases are usually 5 to 20 years. When investing in NNN, the tenant should be knowledgeable, with considerable capital investment on his own, and have proven a good business model that is profitable and possess only a minimum risks for both parties. The most common businesses ideal for NNN is commercial businesses like franchises of fast-food restaurants and pharmacies. Franchises have been established having their own proven marketing strategies and tested business operations.

Triple net investments generally involve purchasing free standing buildings which are leased to creditworthy tenants with a 10 to 25 years term. NNN investments follow the bond lease wherein the tenant is fully responsible for the business operations including repairs, replacements, and maintenance, and the lessee is liable for all expenses of the property like insurance, taxes, and other expenses. As an investor, you have to evaluate the real estate, the tenant, and the lease. if you want to be successful in triple net investments, then you have to ensure that your tenant has a profitable, established, and reputable business. It is crucial to read and understand the lease and the applicable yearly rental rates basing on per square foot and make comparisons to current market rates. For more details about NNN investments, feel free to check our website or homepage.

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