If you are considering the purchase of NNN properties for sale, one of the most important factors that should influence your choice is the tenant. Triple net properties are a hefty investment, and you will want to ensure that you make some of your money back. This can be done through the careful selection of a property.
Location, lease term, property history, and tenant records are all important aspects of selecting your property. The last thing you want to do is end up with a property that has a history of little to no traffic or where the tenant is less than punctual with the upkeep of the building.
A Little About Triple Net Properties
Triple net (NNN) properties generally provide individuals with a low-risk, high-return investment. Additionally, this type of investment is primarily hands-off as far as one’s role in the upkeep of the property. Outside of the building’s structure (i.e., roof, electrical, etc.), the mortgage and maintenance needs of the building are left in the hands of the tenant.
This alone makes finding the right tenant an important factor in choosing your property. Typically, when NNN properties are listed for sale, this means the tenant’s lease has run-up, and they are vacating the property. However, there are other reasons an investor might choose to sell.
Chain businesses are commonly the best type of NNN investment because they are more reliable on returns and steady revenue. However, small business properties have benefits as well. The property you choose may very well depend on the current tenant and whether they are a reliable source of income.
Most people can invest in a triple net property, whether on their own or through a group of investors. Meeting the requirements for an individual investment can be difficult for some. As a result, becoming part of a group venture could be the right alternative. Also, this allows you to learn how the market works.
One of the best characteristics of a triple net property is that most will come with a ten to twenty-year lease term. This means that you have a greater chance of receiving a substantial return on your investment. For assistance finding the right property, consider hiring a triple net property advisor!
3 Tips for Determining What the Best NNN Tenant Looks Like
#1 Established Business
Many NNN properties will be on the market because the tenant’s lease has come to an end. However, this is not always the case. When possible, you should put established businesses at the top of your list.
Starting your investment with a new tenant can be tricky since that tenant is not already established. Conversely, a tenant that has been at the property has had the opportunity to establish themselves as a reputable business. Furthermore, deciding to renew a lease is always a good sign as it can signify that that particular property is in a great location.
Location is one of the most important factors you should look at when selecting your triple net property.Ask yourself questions like:
Is the property located in an easily accessible space?
What does traffic flow to/from the property look like daily?
Does the building stand-alone, or is it in a strip mall?
Is the building located next to, or in, a shopping center where consistent customer traffic is guaranteed.
Is the property on the side of town that will be growing for years to come?
These are all relevant questions an investor should consider. Geographic location is everything! Speaking with a triple net advisor is a great idea because this helps you understand which property is best for your investment abilities.
#3 Positive Tenant History
Selecting a tenant with a positive rental history is important to the overall success of your investment. Unreliable tenants don’t pay the bills on time and fail to meet the requirements of building maintenance. Moreover, they may or may not take lease terms seriously.
As an investor, the best course of action for you is to dig into the tenant’s records and ensure they are a well-established business with a history of on-time payments. Remember, with NNN properties, building maintenance is in the hands of the tenant. Therefore, have a great tenant also ensures your building will stay in excellent condition.
Choose Net Lease World to Find Your NNN Properties For Sale!
Net Lease World has listings of NNN properties for sale in your area! Log on to our website and discover what businesses and properties are for sale in the community. Each listing comes complete with pricing, pictures, and other details that you’ll want to know as a potential investor. From 7 Elevens to Dollar Generals, we have all the listings.