Typically, a triple net lease for sale (triple-net or NNN) is a written lease agreement on a property whereby the lessee or tenant makes a promise to pay all the expenditures of the property. The expenses might include building insurance, maintenance & real estate taxes, etc. there shouldn’t be any misunderstanding as the expenses would be deducted from the rent or other utilities, yet these are contained within the cost of rent and utilities. But as compared to some other cases, like in standard commercial lease agreements, all of or some of these payments are normally paid by the landlord.
An Exceptional & Considerations
Because the triple net lease for sale properties are relatively at low risk, therefore such properties are becoming more popular investments for the investors, who are seeking steady income. Mostly the triple net lease investments consist of a portfolio of high-grade commercial properties, which are fully leased by a single leaseholder. The shopping malls, industrial parks, office buildings, or free-standing buildings operated by banks, pharmacies, and restaurant chains could include as commercial properties. Generally, the lease term agreement is made for 10 to 15 years including the contractual rent.
Do You Agree, if a Triple Net Lease a Good Idea?
A triple net lease for sale agreement offers some benefits for both the landlords and tenants.
Benefits for Tenants
In this agreement, the tenant also avails more freedom with the building structure, as they can customize their space for more brand standardization without making a capital investment of a purchase. Moreover, such a lease is likely to be flexible to a certain extent.
Benefits for Landlords
On the other hand, the landlord also gets advantages with this deal. With a net lease properties for sale agreement, the landlord gets a consistent source of income, because there are rather low overhead costs. The agreement makes the landlord live in peace, as he does not have to play an active role to manage the property.
Calculating a Triple Net Lease
You can calculate the whole amount of a triple net lease including your profit, and loss through several ways. In some cases, the landlord adds up most of the property taxes, maintenance and common area expenses, and insurance for a building. All the expenses are divided by 12 months. This type of calculating method can be more shortened when there is only one tenant leasing a building. They estimate the monthly base rental amount on a rate per square footage.
Is there any Serious Responsibility that goes to the Landlord in a Triple Net Lease?
Though the tenant is considered responsible for most of the expenses related to a commercial property with a triple net lease for sale agreement, yet the landlord may also be known as responsible for the structure, and roof. Sometimes the parking lot is also measured as the responsibility of the landlord.