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When you hear of triple net properties, it’s normal to cast your thoughts and focus on the positive returns associated. Well, this notion is valid for the most part.
Why? If you purchase one of the many triple net lease properties for sale as an investor, you’re guaranteed constant income as tenants pay rent since there are lease agreements in place.
Although this is a reason, NNN properties are favored by numerous investors because maintenance and other expenses accrued by the property are taken care of by the tenant. As a result, this investment firm can be said to be in an echelon of its own when it comes to convenience and rewarding perks.
While building your real estate portfolio by acquiring net lease properties for sale might seem like an exciting prospect, investment opportunities on each differ.
To ensure that you make the returns you’ve always dreamt of, it’s essential to make some crucial considerations. This form of real estate can be positive or negative, and we trust that you wouldn’t want to bear the repercussions of the latter.
In this article, we’ll be breaking down the nuances of triple net properties and what factors must be accounted for before taking that bold leap. Are you looking for answers? Ride along as we aim to kickstart your real estate adventure to a flyer.
In This Post:
Net Lease Properties: Vital Considerations Before You Go on With That Purchase
No real estate investment is smooth sailing in all ramifications. However, there’s no reason not to make concerted efforts geared at making that investment goal of yours come true.
If you’re thinking of splashing out cash on one of the many triple net lease properties for sale in your state, you must make these considerations. They include:
As long as you’re into real estate, you should know that location can make or mar your investment. Well, the same applies to that NNN property up for sale.
To avoid mincing of words, we’ll be dividing the location caveat into two segments:
- Physical location
- Geographical location
You don’t wake up in the morning and buy a NNN property. Unless you’re playing the “game of chance,” it’s essential to have an insight into the physical standing of an NNN property.
With this focal point in view, you should be looking for a building in a part of town known for good traffic flow at any given time. Asides from that, ensure that the property is accessible from all vintage areas.
Suppose you have doubts concerning your decision, zone out and look at the area around the NNN property. Do you see other businesses thriving? That’s a sign that you’ve made the right decision. Consequently, you should have a befitting tenant without hassles.
Geographical location shouldn’t be relegated to the back burner as this segment gives rise to the success or failure of an NNN building. Here, it’s important to consider demographics.
For context, areas that have experienced an upward shift in population growth are ideally suited for NNN enterprises. So, as long as the population keeps rising, the odds of your triple net property staying afloat increases.
Another indicator for a good geographical location is the employment rate.
When people are gainfully employed in one part of the economy, it’s normal for stores to make more sales as customers have the financial power to make purchases without hassles. The reverse applies when unemployment is prevalent.
The Type of Tenant You Want
Even if you haven’t made a pick from the numerous net lease properties for sale, it’s important to think long-term. Therefore, it’s vital to establish the kind of tenant you’d like on your property.
Since NNN tenants are usually established franchises, it’s crucial to understand how secure they are financially. Here, you might want to do your research and find out their business operating model.
Once all of this is done, and you’re confident that the intending lessee is buoyant to make rent for the set lease agreement, you can now seal the deal.
If you don’t put too much thought into this and your tenant can’t meet up rent, in the long run, you might have to shoulder the burden of a strenuous activity – seeking replacements.
Length of Lease Agreement
The lease term determines how long an investor should receive rent from a tenant. When the length of an agreement is longer, the landlord is in the clear as they’re sure that the daunting task of re-tenanting is reduced to the barest minimum.
Typically, lease agreements should last for up to 25 years. However, it has been seen repeatedly that some NNN investors are scared of signing lease contracts as long as these.
That said, you can’t blame these individuals as lease agreements give little thought to inflation. With this in mind, you might be better off signing up for a contract that’s to run for 10 or 15 years, tops.
Engage the Services of a Net Lease Advisor
Not everyone has the patience to take all these considerations into account. In a scenario whereby you’re beginning to feel overwhelmed, put things into perspective by hiring a net lease advisor.
So, who’s a net lease advisor? They’re professionals that have a vast understanding of the NNN property market. These experts can help you find the best net lease properties for sale and how you can harness them to yield a positive ROI.
With so many net lease advisors out there, you’ll want to be serviced by the very best. Before you make that hiring decision, ensure that you lookout for the following:
- Someone that has a track record that other people approve. Endeavor to go over deals they’ve negotiated and how they made them feasible.
- An individual focused on your long-term goals and reiterates their commitment to follow them to the latter.
With all these checked and balanced, you can now make that hire sure to improve your fortunes in this budding industry.
If you’re seeking to secure a triple net investment from the NNN properties group, factoring in the above considerations should work the trick.
While going through these factors might seem daunting, you can always seek help from seasoned investors or a net lease advisor. Regardless of what path you decide to take, ensure that you apply the pointers you receive to a fault.
The industry’s yours for the taking. Get the property that tallies your budget when you visit buynnnproperties.