Triple Net Lease
Hi all!
Can someone please explain a triple net lease to me? I have been studying REI for seveal months and heard the phrase a couple times.
Thanks in advance,
JD
Hi all!
Can someone please explain a triple net lease to me? I have been studying REI for seveal months and heard the phrase a couple times.
Thanks in advance,
JD
Hi JD,
A triple net (NNN) lease just means that the tenant(s)/leasee(s) is responsible for all costs associated with the property/asset being leased - such as insurance, taxes, utilities, maintenance, etc., in addition to the rent that's being paid. These are commonly used with the leasing of large commercial properties like office buildings, industrial warehouses, restaurants, shopping centers, single-tenant buildings (Eckerds, Advance Auto, Home Depot, etc). They are great properties for 1031 Xchanges because they are virtually maintenace/hassle free.
They are usually priced based on the tenant, lease (term, rent, variation of NNN), cap rate, and property (sq ft, yr built, etc) among other things. These properties are good to have during retirement.
James