Net Leases in Business.
Depending on where you live and the polices affecting the area that you are in real estate could entail a lot of things. A net lease is a lease in real estate where the tenant covers the rent as well as all or some part of cost associated with maintenance, usage or operation of the property. The costs could be taxes, utilities, property management fees, trash collection and in other cases janitorial services.
The usual costs are broken down into three major costs which are usually taxes, maintenance, and insurance. Net lease co9me in three basic types and as a new investor you need to understand them before you venture into a market that features all of them. The the first category of the net lease is the single lease where the tenant will pay the rent and property tax. With the double lease the tenant pays the insurance premiums on the property, the property tax and the rent of the property as well.
NNN or the net-net-net lease is the third type of net lease and with this one you are required to pay the rent and cover all the expenses that come with the property , this favors the landlord. Single net leases are unique for the reason that the tent carries very little risk, they are only liable for the taxes apart from the rent, this net least is hard to come by. As much as the tenant is only paying the taxes in the single net lease, some landlord will ask the payment to go through them so that they can keep track of the taxes and certify that none has been missed.
Having made the decision to make an investment in a property that has a net lease, you need to know that the leases will almost always favor the landlord. It is possible to negotiate them and one should consider doing so . The the main reason to consider negotiating the leases is because you will have to pay them regardless of your business doing well or suffering loses.
The rent before the percentage of the usual costs should be less than being in a standard lease agreement. This all points to one thing, research an investor will take a risk only when they are assured that the risk is worth taking, with the same intense research they need to understand the details in the lease . The most common alternative to net leases is a gross lease where payment is a flat agreed upon amount per month.