Using NNN Properties For Passive Income
Are you someone who is looking for commercial real estate (CRE) options that help build up your wealth? It’s important to note that CRE investments can be costly and unpredictable. They also are difficult to sell or exchange for cash without giving up value. One great way to overcome this is by seeking NNN properties for sale.
At Net Lease World, we provide investors like you with tailored solutions that best fulfill your needs. Whether looking to upgrade to a higher NOI property or accommodate a tenant, we stand ready to help.
Today, we’ll discuss a few ways on how you can use triple net properties to build your wealth.
Choose NNN Properties For Sale That Help Meet Your Goals
One great perk of investing in NNN properties is the low barrier to entry. You can enter the market with the range of $500,000 to $1 million to invest. To know which NNN property type best addresses your lifestyle and financial goals, conduct a risk assessment.
A risk assessment helps you understand your capacity for the possible risks and what you’ll need financially going forward. Once that’s done, look for high-credit tenants that provide essential, recession-proof goods. Below are some examples of tenants that best fit this category.
Auto parts stores
You should also ensure that you lease to companies that guarantee the lease for 10 to 15 years. Another crucial step you should take is to require little to no landlord responsibilities.
Having the right mix of tenant types and asset classes will help provide you with ample responsibility-free income. You’ll also be able to obtain an NNN at the lowest possible risk.
Take Advantage Of Tax Opportunities
There are some routes you can take to save money on taxes. They can help boost your ROI and put NNNs in line with other investments.
A 1031 Exchange is a great way to save money on taxes. With 1031 Exchanges, you can swap out one investment property for another and be able to defer capital gains taxes.
This lets you preserve money that you otherwise would spend to pay the taxes. You’re also able to do two things with this extra money.
Make a bigger down payment on your new property
Buy an additional property
As long as you reinvest while meeting the 1031 timeline and IRS guidelines, you could defer the taxes indefinitely.
Cost Segregation Depreciation (CSD)
You may be able to benefit from a cost segregation study (CSS) and CSD tax law. They can speed up depreciation of some building expenses you may encounter. A CSS helps save money for you via these three ways.
Depreciates over decades into much shorter depreciation periods
Frees up capital for other investments
Identifies and reclassifies costs
Based on property and tax variable types, it’s possible to reduce some non-structural CAPEX improvements to shorter tax lives. Here are some examples of CAPEX improvements you may be able to depreciate.
Heating and cooling systems
Your tax life may be as low as five, seven, or 15 years depending on your situation. You may even be able to write off the year of the purchase altogether. This helps you preserve capital, increase your tax savings, and achieve instant cash flow.
Widen Your Portfolio
If you’re really looking to go the extra mile, you should take steps to diversify your portfolio. You could look to own properties in many mixes of locations, such as rural, urban, or suburban places. What you also could do is look to diverse tenant types and asset classes.
For example, you could seek to own truck stops in different states. You also can try to own an auto repair shop and a fast-food joint at the same time.
With diversifying strategies like these, you’ll lower your risks even more. You’ll also build more wealth with a strong portfolio of tangible assets and stable income. When seeking NNN properties for sale, look to make widening your portfolio part of your plans.
Seek The Help Of A Trusted Advisor
When making these big decisions, you don’t want to rely solely on DIY approaches or listing agents. Many problems like the ones below can occur with these strategies.
Hidden lease terms
Lack of transparent details
Limited options to perform inspections on NNN properties for sale
More stress, time, and costs that distract from your goals
Not only that, but this can also lead to long-term financial burdens. For these reasons, it’s best to seek the help of a trusted advisor.
At Net Lease World, our team will ensure you’re getting the best investment deal via these practices below.
Get to know your goals
Assist with your financial and risk assessments
Check for hidden costs
Conduct due diligence
Find your ideal NNN property
Negotiate the best sale price and cap rate
Review and explain the lease terms
We’ll also provide you with professional resources that will help guide you at every step.
Choose NNN Strategies That Help Build Your Wealth
Seeking NNN properties for sale can be a big decision. For this reason, you’ll want to have the best strategy in place to help you achieve the best results.
To learn more on how to obtain the best NNN investment value, contact Net Lease World today. Our team will provide you with the tools you need to enhance your wealth.
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