If you have never heard of the NNN Lease, also known as the triple net lease, you need to grab a cup of coffee and hurry back. This is about to get really interesting from the point of view of the average investor. If you are new to investing, have just discovered real estate investing, or simply are trying to test the waters for investing, you will find much to appreciate about triple net investing.
What are the benefits of this intriguing investment type?
Your Responsibility
If you are like most people you have enough responsibilities to choke a horse. Wouldn't it be nice if you could reap the rewards without facing nearly as much of the responsibilities of typical landlord property owners? Whether you own a business complex, a single investment store unit, or an apartment complex with several residential units there are many reasons to love the fact that you are only responsible for the structural integrity of the building in an NNN Lease.
Tenants Responsibility
Here is where things get really interesting. The tenant, in a triple net lease, is responsible for the utilities, the taxes, maintenance, and upkeep of the property. The owner is only responsible for keeping the property from falling down on top of the tenants. It's a dream for the average real estate investor.
The Downside
While there are few negatives for investors about this transaction type, there is one that bears mentioning. You might actually lose tax benefits that this property could net you otherwise. Talk to a CPA and discuss your options and the potential risks in detail before jumping into an NNN Lease.
As you can see there are plenty of reasons to consider and be wary of a triple net lease, and not all of the reasons are going to appeal to you. In the end, it is something you should discuss with a qualified accountant and a realtor who specializes in these types of transactions.
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Author: Cheryl Marland