If you’re looking for commercial properties for sale, why not go for net lease properties? A net lease is a commercial lease that holds tenants responsible for building expenses apart from their rent. These costs include property taxes, maintenance fees, insurance costs, etc.
These investments are perfect for individuals who prefer investing in low-risk commercial properties to achieve a steady cash flow without management and maintenance responsibilities. If this is something you’re looking for then this is the right place! Net Lease World is the best online platform to look for high-quality net lease properties for sale anywhere in the country, no matter your budget.
There are three common net lease property types: single, double, and triple. Each kind has distinct pros and cons for investors. Let’s go through each one in more detail.
Single net leases — or N leases — are the least common net lease type. With properties under this lease type, owners transfer minimal amounts of risk to lessees, who are responsible for paying property taxes. The rest of the necessary property expenses like insurance, utilities, and maintenance fall under the landlord’s responsibilities.
Tenants under N leases end up paying lower rent than traditional standard leases because of the additional burden from property taxes. However, even higher rent does not equate to the termination of the investors’ responsibility to update expenses.
Should a renter miss payments due to the municipality, the burden still falls on the landlord. In most cases, property owners integrate taxes in the rent to ensure that their property does not default on taxes.
Double net leases — or NN leases — are particularly popular in commercial real estate. In properties under this lease type, tenants pay property taxes and insurance premiums on top of rent. The rent is typically lower because of the additional responsibilities for lessees. Additionally, landlords cover maintenance costs.
For large commercial properties like shopping malls and massive office complexes, investors divide taxes and insurance costs based on the size of the leased space. Landlords should use this technique for areas with different square footage.
As with single net lease properties, landlords collect rent and additional payments to forward them to the principals. The tenants pay these costs to landlords, but the owners are ultimately responsible for these payments because their names are on the tax and insurance bills.
Landlords often ask renters to forward their payments to them, guaranteeing that the former won’t incur extra fees caused by late payments.
Triple net leases are the most common net lease types in the market.
Out of all net lease types, triple net leases — or NNN leases — absolves the most risk for landlords. With triple net lease properties, tenants pay for rent, taxes, insurance, and even structural maintenance. The base rent for NNN leases is also often lower because of the additional expenses for renters.
In some cases, maintenance costs skyrocket, leaving tenants attempting to get out of their leases. However, if they agreed to a bondable net lease, they cannot terminate their leases before their expiration dates or alter the rent for any reason.
NNN leases may boost operational expenses for tenants, and they may be responsible for insurance policy deductibles and property damages not covered by insurance companies. These leases often last over ten years and include concessions for rent increases.
We’ve made a list of the advantages and disadvantages of triple net lease properties for owners to help you decide if they’re the ideal investments for you.
Through Net Lease World, you can find top-rated net leases and 1031 exchange properties to provide you with reduced-duty, low-risk investments that can help you gain a steady income source for many years to come.
We have a diverse range of net lease properties for sale from all over the country to match different needs. Get in touch with our specialists now to create the portfolio of your dreams.