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The NNN Lease, or the triple net lease, is a standard lease structure utilized in commercial land. Despite the NNN leaseu2019s recognition, the triple net lease structure remains commonly misunderstood by many commercial land professionals.<br><br>
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6 Major Criteria For Triple Net Lease Investment Lease MEDICAL OFFICE PROPERTY
The NNN Lease, or the triple net lease, is a standard lease structure utilized in commercial land. Despite the NNN lease’s recognition, the triple net lease structure remains commonly misunderstood by many commercial land professionals.
What Is A Triple Net (NNN) Lease? • A triple net (NNN) lease is defined as a lease structure where the tenant is liable for paying all operating expenses related to a property. The triple net or NNN lease considers a “turnkey” investment since the owner isn’t accountable for paying any operating expenses. Thereupon said, to thoroughly understand the NNN lease, you want first to understand the spectrum of economic land leases. • Here are Six significant criteria of NNN.
Future Rental Potential Analysis: Rent analysis is the very first one needs to do before stepping into a Triple Net Lease Investment. The present tenant and therefore the chosen location might sound perfect to you. • Credit-Worthiness Of The Tenant Vs. Location: Always look over the credit history of the tenant when analyzing Triple Net Lease investments. A tenant who features a good investment grade credit is often advantageous, but not always. • Market Understanding: The main success factor is a thorough understanding of the market area. That’s why investors often target markets in which they’re conversant instead of markets they don’t know well.
Understanding Lease Structure: NNN investments are considered a passive income opportunity. Hence the property lease must be an Absolute Triple Net Lease. The lease must clarify that the landlord/owner is free from any tax, utility, common area maintenance costs, and building maintenance. • Lease Term: When considering NNN investments, it’d be better to travel for long-term leases, with approximately ten years or more. • 1031 Exchange Funds: Investors can use the lease amount from a relinquished property to shop for another Triple Net Lease property. It is often the wisest way of doing billboard land investing.
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