The NNN lease is a lease used by many businesses to gain the most control over a property without purchasing it. This is a long-term investment option lasting for 5 to 50 years depending on your need. In this type of commercial real estate product, tenant or lessee pays the rent plus the insurance, taxes and maintenance and repair expenses. These types of NNN properties are much beneficial assets for large and medium businesses across the world. This is why they have become a popular tool of investment.
Benefits of NNN Lease-As a landlord, you have no management and maintenance responsibilities in this lease, because the tenant will pay all taxes, insurance and handle the maintenance of the building. You will have a better chance of having a long-term tenant and thus generating stable income. Because the tenants are usually well known companies, it is much easier to sell this type of leased property, if the landlord decides not to own the property. Net lease is one of the affordable net investments that give tenant more control over property and he has freedom to rearrange the set-up to suit his requirements.
Downside of the NNN Lease-There might be certain risks for the landlord in NNN properties. If he gives his building to the tenants who are in financial crisis, they may not make the repairs tasks needed, pay the insurance payments or pay the taxes. In this way, the owner of the building could be left to scramble to pay property taxes in the end. Another problem could be plumbing failure or roof replacement, which a bad tenant may ignore. Repairing task not done on time may lead to the damage of the whole building in the long run. So, make sure you give your property to someone with good credit history.