Tips to help you maintain an NNN property for sale
Triple net properties, commonly known as NNN properties, are commercial premises leased under conditions that differ from other lease agreements. The tenant is responsible to pay all expenses related to the premises, including insurance, property tax, and maintenance of the property.
These kinds of properties are unique because as an investor, you are not responsible for any expenses or management. If you’re looking for NNN properties for sale, searching online is the best option. Here are some things to consider while looking for NNN properties for sale:
- Quality of the tenant
Well-reputed and large franchise chains like McDonald’s, Dunkin Donuts, or Starbucks are desirable as tenants.
A tenant with a strong credit history and financial background is desirable, and if you do not choose the right location, you may find it difficult to re-lease the property in case the existing tenant vacates it. So, ensure that the chosen property is located in a neighborhood that makes it accessible to and desirable among tenants.
It is recommended you choose NNN properties for sale located in a market that you’re well aware of.
Investing in triple net properties is a source of secondary income, so you must ensure that it is an absolute NNN lease. The lease deed must specify that the owner does not have to pay any taxes or any form of building maintenance expenses. If you are buying a pre-leased property, procure a copy of the lease agreement and review the terms and conditions to evaluate the liabilities of both the parties, that is, the landlord and the tenant.
The primary objective of investing in NNN properties is to earn additional income through rent. You need to check the balance period under the lease agreement as your income depends on it. Also, the re-lease costs are high, which means you need to invest more while leasing the property after the current lease expires. So, it is recommended to opt for properties that have long-term agreements to earn more income.
Pros of NNN properties
- As an owner, you don’t have to incur additional expenses toward maintenance, insurance, and taxes
- Such investments provide a steady flow of secondary income
- For tenants, NNN lease offers greater property control without owning it
- They are a cost-effective option for tenants as the rent for NNN properties is lower
Cons of NNN properties
- Tenants have to incur more expenses over and above the base rent
- Tenants may have to pay certain unexpected inconsistent expenses due to damage and repairs
NNN properties for sale are excellent investments, but it is recommended you take assistance from a skilled and experienced professional for maximum benefits.
