"Hidden" Costs Associated With NNN Properties
My first run into commercial NNN properties. What are the kinds of expenses I should budget in that's not included in NNN?
Prop Management: 4% of rent
Insurance?
Misc. 1%
Vacancy: 5%?
Any insight would be appreciated.
Thanks!
If it's a true NNN, and to a quality tenant, I would be VERY surprised if you paid any prop management fee.
But you will need insurance, but that should be provided by the leassee.
You should spend more on accounting than prop management or insurance - as for the vacancy projection - you should pursue a long term lease so vacancy shouldn;t be a big concern. But if it's a unique property and goes vacant, no amount of budgeting for vacancy is enough.
Look at the deffered maintenance that may be your reponsibility ( Roof, Plumbing, Air) Look at the lease(s) CAREFULLY and see what you ARE indeed responsibles for.
_________________
Gregg Fous
[ Edited by GFous on Date 08/12/2004 ]