Are Triple Net Lease Properties Right For You?

You’ve done your homework: you’ve found the right property, made the necessary improvements, prepared the required documents, and found enough lessees to occupy your building. Now what? You just sit there and collect the monthly rent and everything will be fine and dandy right? Not necessarily.

Being a landlord is more than just buying and renting out a property, and definitely more than just collecting the rent every month. It’s also about managing and maintaining the said property, addressing any problems that crop up and keeping the tenants happy, safe, and satisfied. And of course, it’s also about keeping a regular cash flow coming.

If done right, not only should these actions demonstrate that you are a good landlord, it also prevents your building from falling into disrepair. But some proprietors cannot afford to provide the time and sometimes the money needed for such an undertaking, because more often than not the funds that go into such tasks come out of the landlord’s own pockets. So what do you do then? This is where lease agreements are most helpful.

Choosing the right type of lease agreement is the key for absolving the landlord from some or all of the costs of maintaining the general upkeep of his property. There are various types of lease agreements, and it all depends upon the negotiation between the landlord and the lessee. triple net lease properties are the most common, which is under a triple net lease agreement.

A triple net lease specifies that the lessee pays taxes, building insurance, and maintenance fees on top of the base rent. Most commercial buildings aretriple net lease properties, indicating that instead of the landlord having to take responsibility for taxes and fees for general building maintenance, it is the tenant who provides the money to pay for everything.

This agreement is suitable for proprietors who prefer to be hassle-free in terms of payment for the building costs. It’s also beneficial for tenants, because the additional income should make the rent for the use of the building a little less than if only the rent were collected. Keep in mind though, that although triple net lease properties are common, they don’t suit everybody and finding the right lease agreement should always be the priority of every landlord and tenant.