Why do single tenants have net leases?

Single Net Leases The landlord is also responsible for any maintenance and/or repairs that must be done during the course of the lease within the property. Tenants under a single net lease end up paying slightly lower rent than with a standard lease because of the added cost of property taxes.

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.

Why would a tenant want a NNN 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.

Are Triple Net properties good investments?

Why are triple net leases a good investment? Because single-tenant triple net (NNN) properties can provide some of the most reliable income streams in the commercial real estate investment industry.

How much does NNN add to lease?

NNN stands for net, net, net. It means that the tenant pays most of the expenses. They pay the rent fees plus property taxes, property insurance, and CAM, or common area maintenance. The NNN fees are added onto the base rental fee, which is usually calculated as a dollar-per-square-foot number like $15.

What is single tenant NNN?

A single-tenant triple-net (NNN) property is a property which is 100 percent leased to one tenant with a lease structure in which the tenant is responsible for all property related expenses.

What should I look for in a NNN lease?

5 Things to Look For in a Triple Net Lease Agreement

• Monthly Rental Sum Agreement.
• Tax Responsibilities.
• Insurance Premiums and Claims.
• Upkeep, Repairs and Maintenance.
• Utilities and Janitorial Costs.

What is the average NNN rate?

The estimated operating expenses (aka NNN) are $10 per square foot per year. The total yearly rent you would pay equals $40 sf per year. So if you are leasing 3,000 sf then your yearly rent would be $120,000 or $10,000 per month.

Is triple net lease bad?

Drawbacks to a Triple Net Lease There is an inherent danger in using a triple net lease with regards to the unknown. Unexpected and substantial damage to the property could significantly increase your monthly maintenance and repair costs.

Is triple net lease good for tenant?

The most obvious benefit of using a triple net lease for a tenant is a lower price point for the base lease. Successful properties with low vacancy rates also make triple net lease attractive for a tenant as the taxes, insurance, and maintenance costs are divided by a greater number of fellow tenants.