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The Benefits of Working with a Net Lease Advisor

Net Lease Advisor, Ted Dowding

Commercial real estate is an industry where the collaboration of tenants and proprietors can be regulated by various types of agreements. One of those is the triple net lease agreement that is widely used in commercial real estate these days. Given that triple net lease investment has a bunch of nuances before and after putting the property into operation, the net least advisor would be needed in this case.

A net lease advisor is an expert in commercial real estate, who is particularly specialized in net lease investments and agreements. Whether you are a seasoned investor or a newbie in the sphere of commercial real estate, a net lease advisor would become a great helper for you. Thus, you will save lots of your time and get to know all the nuances of the net lease investment with the help of a net lease advisor. Continue reading this article to know more about the responsibilities of a net lease advisor, learn how to find the best net lease advisor, and discover more about the benefit of a triple net lease for investors.

Why Work With a Net Lease Advisor?

The world of real estate is like an ocean – you might observe and understand what is happening from the outside, though you will not likely know what exactly is under the water without exploring it. In brief, a net lease advisor is an expert in the real estate field who would be able to help you with exploring the real estate market. That way, you will get to know all the necessary details related to net lease investments.

After presenting a general idea of who net lease advisors are and which sphere they operate in, it is necessary to go into detail on their particular tasks. This will obviously help you to understand more about what to expect from net lease advisors and which scope of tasks they will help you to resolve.

Property Evaluation

As an expert in the real estate field, a net lease advisor is keen on exploring real estate property and evaluating it. In particular, commercial real estate is mentioned here as net lease agreements are dominantly prevalent in commercial rather than conventional ones.

A net lease advisor can precisely assess the property you are interested in and estimate its monetary value in the market. This is crucially important to know the true price of the real estate property in order not to get baffled when compiling net lease agreements.

To evaluate the real estate object, a net lease advisor pays attention to a range of factors that tend to influence the price. Most commonly, the location and area landscaping are considered to be the dominant indicators for the overall property cost. Another important aspect is the age of the building and its current condition. A net lease advisor also pays attention to the available amenities and facilities.

Investor Analysis

When you address a net lease advisor and ask for their professional advice, you are also supposed to tell more about yourself as an investor. This is usually possible by showing your investment portfolio and providing more details on which real estate items you already have in possession. Based on such details, a good net lease investor will tell you which real estate objects would be the most suitable for you.

Market Exploration

A net lease investor is your guide in the world of commercial real estate who helps you to discover the “underwater” secrets. Such characteristic features as an understanding of the processes in the real estate market make up the value of net lease investors as experts. Being operating in the commercial real estate market, an experienced net lease advisor knows its current dynamics and can predict what is going to happen in the nearest future. Such skills greatly help investors to choose those real estate objects that would be particularly profitable.

Net Lease Agreement Expertise

Last but not least area of expertise of any net lease advisor is the perfect understanding of all the nuances related to net lease agreements. Those refer not only to the specifics during the property acquisition but also such details as when tenants are changing, for example.

How to Find a Net Lease Advisor?

Besides understanding who a net lease advisor is, it is also important to know where you can find such an expert. There are many real estate agencies and specialists in the sphere, however, it is crucial to select the one that would meet your expectations.

When choosing a net lease advisor though, you have to pay attention to several crucial factors. One of the basic ones is the experience of the expert: years of operation within the sector and the type of clientele experts tend to collaborate with.

Another proven method for coming across the best net lease advisor is the word of mouth. If some of your friends have already addressed an expert in net lease agreements and commercial estate, ask for their advice.

If you are searching for a reliable broker in the state of Florida, consider Ted Dowding as one of the best net lease advisors in the area. Ted is a licensed real estate broker who also established his own agency TD Commercial Group that successfully operates in Florida for years.

Ted Dowding is specialized in national investment sales and can boast $1.75 billion in CRE closings. Ted Dowding’s agency, Net Lease World, has expertise in sourcing quality off-market deals in a short period of time within any market, which makes it possible to skip a long conventional “listing” process. Moreover, Ted Dowding has created a proprietary strategy to access the best available options in real-time to meet your particular investment objectives.

More about Triple Net Lease Investments

The concept of NNN or triple net lease is rather a popular investment strategy for many business people. The triple net lease programs are common in the commercial real estate sphere mostly.

Each N signifies one net parameter of the real estate agreement between the owner and the tenant. To get into details, the tenant has to take care of these three things:

    Property taxes

    Building insurance

    Building maintenance cost

The triple net lease agreement is based on the net lease and double net lease agreements that are also common in the commercial real estate field. Here you can also consult a net lease advisor as a specialist who could describe the differences between those three types of commercial real estate agreements. Below find some basic information about the net lease and double net lease concepts.

Similar to the triple net lease, other net lease agreements are also aimed to delegate responsibilities to the tenants. In the case of the net lease agreement, tenants become liable for property taxes. When it comes to the double net lease agreement, tenants are in charge of the property taxes as well as the building insurance.

Investors prefer the triple net lease agreements though as those tend to take much weight off their shoulders. Tenants are responsible for almost all the operational costs associated with the property. As a result, a range of benefits is obviously associated with the triple net lease agreement for investors as well as for tenants. However, it is always necessary to keep in mind that there is the reverse side of the medal.

Benefits of Triple Net Lease

For investors:

    Less paperwork. Given that tenants take care of all the paperwork associated with taxation and insurance, owners are not tangled with all the bureaucracy. Moreover, tenants also occupy with bills and management of all the utilities on site.

    Less operational effort. When there is a need to carry out some repairs and maintenance in the building or near it, tenants are responsible for that. Owners do not need to organize anything with construction companies or maintenance brigades.

For tenants:

    Freedom of insurance company choice. As leasees have to cover the building insurance costs, they have also the freedom to choose a particular company to collaborate with.

    Lower rent. As tenants are responsible for property taxes, insurance costs, and building maintenance spending, the rent price is usually low. Owners acknowledge this spending along with the payment for utilities and set the rental price lower than the average one within the commercial real estate market in the area.

Drawbacks of Triple Net Lease

For investors:

    Less control over the property. Even though owners save time due to the fact that tenants are responsible almost for everything under the net lease agreement, this could also put some restraints on investors. For instance, if the building maintenance was not done properly by previous tenants, this could be a challenge for the owner to get everything settled properly before leasing it to new tenants.

For tenants:

    Possibly high costs. Covering all the spending might be really a challenge for lessees. This is particularly common in cases when the cost estimation was not done properly by the owner. That is why tenants can also benefit from the net lease advisor’s help when searching for a property to rent.

Related Articles:

What is the difference between an Absolute NNN Lease vs a Triple Net Lease?

What is the Difference Between an Industrial Gross Lease and NNN?

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