What to watch for in Single Tenant Properties
Are you searching for a new and exciting investment opportunity that offers long-term income? If so, consider searching for NNN Properties for Sale. NNN, or Triple Net, properties are typically a hands-off, stable investment as long as you are methodical about the location and type of business you select.
If you have never invested in commercial property before, the process of selecting and purchasing one can seem overwhelming. However, there are countless resources available to new investors trying to navigate the market.
What is a Triple Net Property?
A triple net (NNN) property is the combination of many different qualifications. Foremost, it is a commercial property.
Depending on the building size and layout, the building can have one or more tenants. There are particular benefits to having a single tenant. For instance, a single-tenant is more convenient as far as management comes in than multiple tenants.
Perhaps the most important aspect of a triple net property is that the tenant is responsible for all expenses related to the building’s property and upkeep. This includes property taxes, maintenance, and other aspects of property care.
Some leases will stipulate that the building owner is responsible for structural maintenance, including the roof, electricity, plumbing, and so forth. However, this is rarely the case, so it is more an exception than the rule.
3 Things to Look for in a Single Tenant NNN Property
#1: Lease Terms
When considering which triple net property you would like to purchase, it is important to carefully consider the lease terms, paying special attention to the lease duration. It is more beneficial to your investment if you choose a building with a lease with upwards of twenty years left on it.
This is because you will likely get more from your investment when you have twenty years to break even rather than just ten years. Look closely at what the lease says about your responsibilities as the property owner.
Most people find triple net properties to be the better investment because all property management responsibilities are placed on the tenant. However, some situations require the property owner to take on the financial burden of structural maintenance.
With leasing terms, it is helpful to consider how much you want to be involved in managing the property.
There are several risks associated with the purchase of a single tenant triple net property. For instance, if the company leasing your building goes bankrupt and must forcibly cancel their lease, then you will be suddenly left to handle all the property management financial commitments.
Or, if the tenant decides they do not want to renew their lease, then the same situation will occur. There are many factors you can look at when considering the risk of property investment. Keep reading to find out more about how these elements can affect whether the property makes a good investment!
One of the best considerations you can make regarding property is its location. For the purpose of discussing property investment value, there are two types of locations: geographic and physical.
Let’s talk about geographic location value first. This type of location refers to the location of the building and the surrounding region.
It is ideal to select a building that is located in a fast-growing area. There are other buildings that will be located in more sparsely populated areas. However, don’t be quick to disregard the value of these properties. Instead, briefly consider whether these regions could experience potential growth in the near future.
For instance, a triple net property might be located in a small town, but should that town sit alongside a major highway or interstate, it could add up to a great investment opportunity.
Physical location value refers to the specific location of the building within a city. For example, is it located on a corner lot with easy accessibility? Or does it sit next to a large grocery store in a large shopping center?
These are all valuable things to consider when searching for the right property!
Consider Hiring a Triple Net Lease Advisor
If you are having difficulty navigating the triple net property market, consider hiring a triple net lease advisor. This type of professional advisor can help you find the right property for your investment.
As with hiring any professional, a NNN lease advisor gives you the benefit of their experience. They will have extensive knowledge of the industry and market. As a result, you will be able to make an educated decision, knowing you’ve got the expertise of a professional advisor on your side.
Choose NetLease World When You are Searching for NNN Properties for Sale
If you find yourself searching for NNN single-tenant properties, visit the NetLease World website for a complete listing in your area!
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