You might be planning on investing in commercial real estate and could be confused about what is the best option for you. You may have ruled out owning a residential building with multiple tenants and have decided to focus on a building with only one tenant. There is an option you might not have heard of before known as a triple-net lease.
Here is what triple net lease or NNN commercial real estate for is and why you might think about looking into it.
The Basics Of NNN Commercial Real Estate
NNN commercial real estate for sale is simply a commercial building you buy with the intent to lease out to one tenant. This lease could be a short one or potentially long-term depending on the benefits for the tenant to stay there. Unlike a typical commercial leasing contract, an NNN means that your tenant pays for the majority of the upkeep, property taxes, building insurance including their own business insurance, repair and maintenance costs of the building as well as either a portion of or all of the property taxes on the building.
This creates a lower-risk investment advantage for you as the building owner. Your tenant pays for the major expenses the building would incur for the duration of their lease. In exchange, a tenant will pay lower rent rates because they are covering the majority of other expenses to keep the building in good repair.
There Are Many Types Of Building Options Available
An advantage to looking for NNN commercial real estate for sale is, you aren't limited to only a certain type of commercial building. You will find NNN properties across all commercial types. This includes movie theaters, shopping malls or retail stores, manufacturing plants and industrial buildings, and restaurants that can all be purchased and used as an NNN commercial property.
When searching for NNN commercial real estate for sale keep in mind the type of tenant that would agree to pay most of the expenses for the building plus rent and target your marketing toward them.
This will be a larger well-established or moderate-sized business for the most part and they may be looking to expand their company. They don't typically mind paying the repair costs or the property taxes because it gives them lower rent and they don't have to worry about paying a mortgage too.
It could also be a business that wants to try out a certain area to see if their business would be viable there before they make a long-term commitment to buying a property themselves.
Look for NNN commercial properties for sale to learn more.