Triple net properties are among the top attractive real estate investments since they offer long-term passive income, low risk, and minimal landlord responsibilities.
Furthermore, triple net (NNN) properties are real estate assets that function by triple net lease, where the lessee pays maintenance fees, insurance, and taxes in addition to utilities and rent.
Are you seeking triple net investment opportunities? NNN Deal Finder has a track record of informing, empowering, and connecting investors to the most reliable NNN properties for sale that generate predictable cash flow.
This article will discuss why to add net lease properties for sale to your investment portfolio and frequently asked questions.
Benefits of Triple Net Properties
There are several advantages of investing in an NNN property, and below are some reasons NNN investments are good for you:
There is less likelihood of defaulting on the lease payments and contracted rent in a long-term net lease when working with an investment-grade tenant. As a result, it becomes easy to detect the lease’s profitability and its ability to sell at a price that replaces capital and brings income.
In addition, unlike short-term leases that sometimes cause landlords to search for tenants periodically, a triple net lease lasts for ten years or more. A triple net investment provides property owners with a very stable rental income flow.
2. Minimal Landlord Responsibilities
Investing in a triple net property means minimal landlord responsibility when you lease the property since the tenant is responsible for the property taxes, building insurance, and maintenance.
Therefore property ownership in an NNN lease is effortless since the landlord isn’t responsible for any operational obligation.
3. Reliable Passive Income
NNN investments are among the top sources of passive income, and you can lease the property to tenants with strong credit that usually remains for years.
If your property manager collects rent and handles other tenant-related issues, you’ll have little to do with the property except for taking tenant turnover or depositing those checks.
4. Protection From Property Increases
Another benefit of triple net properties is that an increase in the taxes, insurance, maintenance, or other expenses don’t affect the landlord because the property’s operational costs are the tenant’s responsibilities.
Frequently Asked Questions on NNN Lease Properties for Sale
If you’re interested in diversifying your portfolio or preparing for retirement, triple net lease properties are great passive investment options. Here are answers to some frequently asked questions on getting the best deals for NNN properties.
1. Why do some triple net properties have a lower cap rate?
Several factors affect a triple net property’s cap rate. These factors include the property location, market growth possibilities, and lease length. As the lease period remaining becomes shorter, the cap rate increases and the price reduces.
You will pay a higher price for consistent, long-term returns with low cap rate triple nets. As an investor, use your investment goals to select a triple net property instead of going for properties in popular locations or big cities.
2. How can I find NNN properties for sale?
Like other commercial properties, you can find triple net investments through online listings or an investment advisor (or a commercial real estate broker). You’re unlikely to stop by a property and speak with the owner about purchasing the property.
As a result, you have to work with an experienced triple net investment broker to explore many options and investigate solid opportunities. This investment type is often open to a particular audience like a triple net investment group and other brokers.
3. What is the 1031 exchange tax rule in NNN property investment?
A 1031 exchange in real estate is a procedure that permits investment property owners to sell the property and purchase a like-kind property or property of equal or more excellent value while deferring capital gains tax. To learn more about the 1031 exchange.
4. What are the best triple net investments?
Due to the variety of potential NNN investments, it is impossible to pick one as the best. Therefore, the best NNN investments are those that meet your criteria. It is essential to research the available lease and tenant structures to understand your signing.
Although some may say Starbucks, O’Reilly’s Auto, or 7-eleven is the best triple net investment, others may suggest local tenants as being better. Nevertheless, ensure you go through the pros, cons, and lease structure of any NNN investment before signing an agreement.
5. Is the landlord responsible for the property maintenance payment?
No. NNN investors have zero landlord responsibilities and can pursue other professional and personal interests since tenants are responsible for all building and maintenance expenses.
Some of the tenant responsibilities include maintaining HVAC systems, mowing the grass, fixing roof leaks, paying property insurance and taxes, etcetera.
6. How can I identify a triple net lease?
Don’t jump in agreement when a seller tells you a lease is a triple net without carefully examining the lease. The perfect way to know if a lease is a single, double, or triple net is to carefully read the lease, have your commercial real estate broker explain the lease details to you, or join a great triple net investment group.
Also, the tenant is responsible for insurance, property maintenance, and taxes in a triple net lease, although small expenses like accounting or legal costs are on the landlord.
7. What should I find in a triple net lease?
When purchasing a triple net property, there are three things to look for, the lease, rent increase inclusion, and termination clause inclusion. Your broker should read the lease carefully, including amendments, exhibits, and supplements.
Furthermore, periodic rent increases are essential in a long-term lease. Therefore, rent increases should be present to counteract inflation effects and ensure the investment maintains its value.
Are you looking to buy commercial property? Triple net lease property investment should be part of your investment portfolio because it is a low-risk investment that offers a reliable income stream.
Get stable, long-term NNN Lease investments from reputable brands with a triple net investment group or licensed real estate broker’s help.