Did you know that since the beginning of 2021, median housing prices have increased by over $30,000? Real estate is booming across residential and commercial properties.
Houses and other properties are reaching record heights. Now has never been a better time for investors to look into a triple net lease for their properties.
These leases can save you money and make managing your investments easier. Keep reading more to learn more about the advantages of triple net lease loans.
Triple Net Lease
A triple net lease is also known as an NNN lease and it is common to see the two terms used interchangeably. So – what is a triple net lease loan?
Basically – in an NNN lease, the tenant will pay for the majority of the rental amount for the property. This includes anywhere from rent to taxes and insurance. Even maintenance should be covered by the tenant in this scenario.
With a NNN lease, the landlord plays more of a passive role in the rental agreement and assumes less risk.
NNN lease loans are most commonly seen in commercial properties and usually provide a lesser rent payment for the tenant since they are assuming all of the expenses.
Many investors use this type of lease for properties such as shopping centers, office buildings, or restaurants. Additionally, it is common to see these as longer lease agreements – closer to ten plus years.
Keep in mind, that investors interested in an NNN lease will need at least $1 million in investments – not including your house. If you are an investor that is looking to build up to $1 million in property value, then you can go a different route and invest in real estate investment trusts.
NNN Lease Advantages
The additional advantage of triple net lease loans is that the investor or landlord does not have to play an active role in the commercial property. It is also a relatively low-risk commercial lease and provides a steady income without the hassle of constant management.
If you are the tenant, it provides a level of independence and creativity with the space you are given. Ultimately, it is a win-win for both sides.
Other Lease Agreements
How does a triple net lease compare to other lease agreements? There are typically three other types of lease agreements, including single net lease or double net lease.
In a single net lease, the landlord will take on most of the risk whereas the tenant usually only pays for rent and property taxes. This lease is less commonly seen as the investor assumes a large amount of risk.
In a double net lease, the tenant will pay for the rent, property taxes, and insurance premiums. However, in this lease agreement, the landlord will have their name on the taxes and insurance meaning they are ultimately responsible.
A triple net lease will create the least amount of risk for the landlord compared to the prior two leases and provides a longer lease agreement for more steady income.
Get Your NNN Lease Today
A triple net lease provides the most flexibility and stability for commercial property loans. When looking at investing in commercial properties and real estate, you want to make sure you are in trusted hands.
Check us out today and start your application process immediately so that you can jump into today’s booming real estate market.
