With a global financial market that is known to be volatile at times, investors are often looking for a stable and predictable place to put their money. Similar to buying a bond, investing in triple net lease properties is one of the smartest and most reliable investment tools available today.
While we know this is a great opportunity for many investors, it can be confusing to those unfamiliar with commercial real estate or 1031 exchanges. Let our experts walk you through the basics of buying and selling net lease properties.
Also, visit our Properties page to see Upland’s list of available net lease investment opportunities. For additional questions, please Contact Us.
Like with traditional real estate investments, a property with a triple net lease provides appreciation and tax benefits; however, many investors prefer triple net leases because they relieve the owner of all or most management responsibilities. In a triple net lease, the tenant typically pays for all building maintenance, insurance and property taxes, in addition to rent. This arrangement can be advantageous for tenants as well, as the rent is usually lower in a NNN lease than with a standard gross lease or percentage lease.
Most NNN leases also provide steady streams of income, often compared to a bond, due to the long lease terms and set rental rates, which are often guaranteed by prominent corporate tenants. Because of this, most triple net lease properties have low turnover rates, which in turn, reduces marketing and leasing costs associated with filling vacancies. There is more predictability, which lowers the risk, and this is a huge advantage for any investor.
In addition, because these types of investments are typically fairly stable, financial institutions may offer better terms to the buyer than they might with other types of real estate investments.