What You Need To Know About Net lease Investments
A single tenant net-lease investment is done by a company or an individual for retail, office or industrial building space. This type of tenant will cater for insurance premiums, property taxes, repairs and maintenance that a net lease investments agreement stipulates.
Credit ratings are evaluated before a net lease investments agreement is signed. With a single net lease investments, the tenant is required to pay rent and the property taxes. Bad and good economic times are good for the single net lease investments. A single net lease investments is the least popular between a double and a triple net lease investments.
Those committed to long-term lease agreements, take these properties for 10 years and over. In order to get a single tenant net lease investments one must show that there will be long-term returns on investment over the life of the lease.
Most of the single net lease investments agreements are by national tenants and franchise owners. Single tenant net lease investments provide good cash flow for a period of time for a landlord. Landlords of these properties enjoy minimal responsibilities over their properties. A single tenant net lease investments agreement will specify whether the tenant will make expense payments to the landlord or to the relevant authorities. There’s always a return with a single tenant net lease investments regardless of the real estate market.
This is because this lease is for a long time and they are also fixed in nature. A risk with these properties is that a tenant can move out or go out of business leaving you to handle all the expenses, taxes and insurance premiums. Those who wish to increase the real estate portfolio can invest in net lease investments. Net lease investments require little time commitment by the owner in terms of management.
Investors in net lease investments properties include individuals and wealthy business owners. Most of the tenants in a shopping mall have double net lease investments. In a double net lease investments insurance fees and taxes are divided proportionally among tenants. The structural maintenance expenses are the responsibility of a landlord in a double net lease investments agreement.
Some of the maintenance issues that an owner may have to take care of as a result of buildings aging, includes replacing a roof, parking lot replacements, plumbing system replacements among other issues.
Most of the tenants in commercial properties have a double net lease investments. Maintenance, building insurance, and property taxes are some of the expenses that are included in a triple net lease investments.
Due to the fact that the tenant covers maintenance, the rent is lower in a triple net lease investments agreement. The creditworthiness in a triple net lease investments is determined by the capitalization rate.