Triple net leases are one of the most popular single occupant lease options for investors. They imply that the tenant is going to pay every cost associated with the property – not only rent and utilities, but also maintenance, taxes, insurance, and more.
It’s easy to see why investors prefer triple net leases, but why are tenants willing to take on those responsibilities, especially knowing that they do not own the property upon completion of the lease?
Benefits of Triple Net Leases for Renters
- Excess Capital
For the lessee to purchase the property outright, they have to invest far more of their own capital, and that means that they may not have as much money that they can invest in their business (or other businesses). Lessee’s prefer to simply rent a property that already exists, allowing them far more cash on hand in the event that they run into any financial issues.
- Location and Property Type
Often the properties in the best locations, or the commercial properties that are the right size for the business, are not for sale. Triple net leases allow you to pick and choose the property for rent, and you can choose one that is ideal for your business’s needs.
- Lower Rent
While not a guarantee, usually a triple net lease will come with lower monthly rent, because the costs associated with maintaining the property are removed. On the one hand, those costs still need to be factored in to maintenance and upkeep, but in theory this strategy allows the lessee to make more decisions with regards to their own finances.
Benefit of Putting Your Property Up for Triple Net Leasing
While there are risk associated with triple net leases, the long term payoff for a high credit lessee can be substantial, because these leases are long term and require very little involvement or further investment on your end. You can also use a triple net lease to acquire a triple net lease loan – a low interest loan up to the value of your property that you can use to invest in other things right now, rather than wait and receive the monthly or yearly rent payments of the lessee.
CRE Lender has linked countless commercial property owners to lenders that are happy to provide them with a lump sum in advance of their triple net lease. Sign up with CRE Lender today to find out more about our amazing lending connection services.
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