Triple net properties are among the most appealing real estate investments for a variety of reasons, including low risk, minimal landlord responsibilities, and long-term passive income.
Today, we’ll go over everything you need to know about net lease properties for sale so you can decide whether they’re a good fit for your investment portfolio.
When you see the phrase “triple net properties for sale,” take a closer look because triple net properties can be some of the safest and easiest to manage properties available for purchase. Triple net or NNN means that the tenant or lessee is responsible for all of the property’s maintenance and repairs, as well as all of the property’s taxes and insurance requirements.
There are numerous benefits to owning a triple net property.
Simple to Manage
The Landlord’s sole responsibility is to collect the tenant’s monthly check.
Responsibilities of Tenants
The tenant is required to repair the roof, remove all trash, clean the parking lot, repair the parking lot, stripe the parking lot, handle landscaping maintenance, take care of plumbing problems, pay all electricity including the power required to run the parking lot lighting, pay all property taxes including property taxes, income taxes, and equipment taxes, and pay for property insurance including liability insurance, fire insurance, and equipment insurance.
The majority of NNN properties are rented to a high net worth company with a good credit rating, so there is little risk in this type of investment.
While triple net properties are leased for varying lengths of time, the majority of them are for a minimum of twenty (20) years with four (4) five (5) year renewal options for a total of forty (40) years.
Rent Increases (Increase in Value)
While increases in the minimum rent are negotiable, the majority of them have a provision for an increase every five (5) years. Some increase year after year. Almost all of them will increase during the option periods, and the majority of them will increase to a fair market value. This means that the rent is adjusted to reflect the market rent charged to comparable tenants for comparable properties in the surrounding area. This rent increase provides the Landlord with an immediate increase in value.
Simple to Sell
Triple net lease for sale properties are always in high demand because they are a very safe investment, and there is a steady demand for this type of property.
This is an excellent type of property to have if you want to exchange into another property, and it is also an excellent property to sell to someone who is looking for a property in an exchange. Due to the tenant’s responsibility for all repairs and maintenance, taxes, and insurance, the due diligence process can be very brief and quick, making them good exchange candidates.
Simple to finance
Because of the tenant’s credit, the property’s low risk, and banks’ familiarity with this type of property, financing is always available for this type of property. When other types of property cannot be financed, this type of property can usually be financed.
As you can see, when you see triple net properties for sale, you should act quickly.