How to Find a Triple Net Lease
How to Find a Triple Net Lease
NNN lease can be a great way to earn money almost effortlessly, but it’s also a type of serious investment requiring knowledge and information. We prepared this article for you to find out the details of this kind of lease and make an informed decision about whether it’s a good variant for you. If you want to know how to find a triple net lease, this material is for you.
What Is It?
This type of lease implies that all the expenditure regarding the building maintenance and repair is the tenants’ responsibility. You make the initial investment by buying the property and renovating it if it’s necessary. Sounds good, doesn’t it?
Keep in mind that your earnings will be lower than in other types of rent. But it’s a steady, fixed income you can count on. Your spending on the leased property is also close to zero because the tenants pay for utilities and maintenance.
This lease is extremely convenient if you own a commercial building in another region and can’t visit them regularly. All in all, you can view this type of renting as a passive income. Renters will not only pay all necessary costs, but they will also take care of your property.
Is It for You?
Just like any other type of investment, the NNN lease has its advantages and drawbacks. Let’s analyze both sides so that you’ll be able to make a decision.
A little amount of effort. You have to act actively only in the initial stage when you purchase the building and make some preparations. After the signing of the agreement, it’s not your responsibility. Your tenants will take care of the property, and you have to do nothing.
Steady and predictable income. Every month you receive a certain sum, and it’s your net profit. You can spend this money as you wish because you don’t have to pay for building maintenance.
Long-term tenants. This type of lease is common for commercial property. Companies don’t like to change their locations and prefer to stay at a place well known by the customers.
High demand for commercial rent. When one of your tenants decides to move, you’ll easily find a new one.
Low income. The rent consists of two parts, and you receive only one of them. The rest goes for necessary payments. It means that you’ll get less money than in other types of leases.
Lack of control. Your tenants can be irresponsible and take bad care of the building they rent. It’s not a problem if you live nearby and can inspect your property frequently.
Slow return on investments. As we mentioned before, your monthly profit will be lower, so the initial costs of buying the building will pay off later. Actually, it’s not always the case. The spending in other lease types is unpredictable, so sometimes you can receive even less than with a triple net lease.
Now you know all the factors to consider. Let’s assume you are inclined to make these investments. Let’s discuss some practical aspects.
Where to Find It?
The first and most convenient option is to find a reliable advisor. Such professionals have the most recent information about buildings for sale and can give you valuable advice regarding location and other specifics. They also have established connections in the world of commercial properties.
This variant requires some spending, but if you hire a real professional, you won’t regret it. The assistance of an experienced advisor will make the process of searching, choosing, and purchasing much easier and faster.
The second way is to search on special platforms. On the Internet, you’ll find multiple options for buying and selling all types of property. If you prefer doing it by yourself, you need to think through all your requirements.
You need to know your potential tenants and have a clear idea of their preferences. It determines the location of your future building. Set the return rate suitable for you and stick to this number. You also need to decide whether you are going to invest your own money or resort to lending services.
When you complete the list of vital criteria, you are ready to study the existing offers and compare them. Don’t rush the selection process; it’s the key to your future success. Make sure you take all the important factors into consideration.
As soon as you find the ideal variant, contact the owner and discuss the deal. If you are lucky, you’ll sign an agreement, and you can start searching for tenants. The period of active action is almost over. Very soon, you are going to sit in your comfortable chair and count your profits. It’s the best part of NNN rent: you’ll get the income without hard work.
Before opting for any variant, calculate your NNN lease potential profits. You can find plenty of free calculators online. Use them to determine your spending and future profits. They are really useful for initial estimation. You may be disappointed by the amount of income provided by this type of lease. In this case, it’s not for you. Find more risky and profitable solutions.
But if you are looking for stability and want to receive a steady fixed income every month without any surprises, consider this opportunity. A triple net lease frees the building owner from almost all responsibilities apart from the structural parts maintenance. So if you want to save your time, effort and money, opt for brand new construction.
You need to know what tenants are best for you. You may opt for chains and international companies or choose small local companies. It depends on your preferences. But you have to determine them before you purchase the building, not after it.
As you can see, this type of lease is a decent way of investment. It has some advantages and downsides in general, but for you personally, it can be the best possible variant to organize another stream of income. In this article, we listed all the details you need for the final decision. Think about your circumstances and the benefits provided by the triple net lease, and you’ll easily understand if it’s your way of investment or not.
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