Are NNN leases good investments?

Are NNN leases good investments?

NNN leases are considered to be one of the most secure investment opportunities. This is because, similar to bonds, single-tenant net-leased properties provide steady and predictable returns over time.

What is the best NNN investment?

NNN properties with tenants who are operating “recession-proof” businesses usually represent the best long-term opportunity for investors….Recession-Proof Business

  • Gas Stations.
  • Convenience Stores.
  • Dollar/Discount Stores.
  • Grocery Stores.
  • Medical Facilities.

What is NNN lease Investment?

A triple net lease (triple-Net or NNN) is a lease agreement on a property whereby the tenant or lessee promises to pay all the expenses of the property including real estate taxes, building insurance, and maintenance.

Who pays what in a NNN lease?

In a triple net lease (also referred to as a “NNN” lease), the tenant pays all expenses associated with the property. This includes real estate taxes, building insurance, maintenance (including structural repairs), rent, and utilities.

Who pays for a new roof in a triple net lease?

As the triple net property owner (unless otherwise specified in the NNN lease), you’ll generally be responsible for maintaining and repairing these 3 main aspects of your building: Roof (repairs, maintenance, upgrades) Exterior Walls. Utility Repairs and Upkeep (for major things such as plumbing and electricity)

What should I look for in a NNN lease?

The Best NNN Tenants Make sure they have a strong history of paying rent on time and have always made tax and insurance payments according to their lease terms as well. You’ll also want to ensure that they’re doing well in the location and have longevity to continue succeeding when you take over ownership.

Why would you want a triple net lease?

Why are Triple Net (NNN) Leases so Common? Landlords prefer NNN leases because they remove some of the unknown financial risk related to commercial property. If taxes or insurance increase, or if unexpected maintenance costs are incurred, then the tenant is on the hook to bear the burden of the additional expense.

What does NNN stand for?

triple net lease
In real estate, “NNN” is an abbreviation for the phrase “triple net lease.” At its core, a triple net lease is a type of commercial lease structure that contains a provision saying that the lessee is responsible for covering certain costs associated with operating the property in addition to paying their base rent.

What is not included in a NNN lease?

An NNN lease is the most common type of commercial lease and is commonly called a triple net lease. On an NNN lease, tenants pay additional expenses in addition to the lease fee, to the landlord or lessor. The NNN fees includes property taxes, property insurance and common area maintenance for a building (CAM).

Is a triple net lease a good idea?

The Good: For the tenant, the triple net lease can be great. A tenant has more freedom with the structure and can better customize a space for use WITHOUT the capital investment of a purchase. The tenant pays less for rent, as they have incurred other expenses.

Can you get out of a triple net lease?

A triple net lease is one of three types of net leases, a type of real estate lease where a tenant pays one or more additional expenses. But triple net leases are usually bondable leases, which means a tenant cannot back out because the costs—especially maintenance costs—may be higher.