Why NNN is a Popular Investment StrategyMarch 10, 2022
NNN Investments | 1, 2, 3
Each “N” in the “NNN” lease represents an aspect of the building’s operation expenses that the tenant agrees to pay for in addition to the rent. Under a triple net lease (NNN Investment), you would be responsible for:
- Real estate taxes
- The majority of maintenance fees.
While triple net leases are more common than single or double net leases, it’s good to know what each additional “N” adds to the lease. Under a double net lease, the tenant is financially responsible for real estate taxes and insurance, while under a single net lease the tenant is usually only responsible for the real estate taxes.
You’re most likely to encounter a triple net lease if you’re looking to sign a long-term lease of 10+ years in a freestanding commercial building. NNN Investments are usually a better investment for your wallet because they are as close to maintenance cree as you can get.
As the Investor, What Other Details Make NNN Investments Popular?
- Insurance: With a triple net lease investment, where one company rents the entire building, that tenant is required to carry an insurance policy for the building as well as potentially pay for any deductibles or uninsured damage during their tenancy. During lease negotiations, the tenant and landlord may agree that the tenant pays directly to the insurance provider instead of through the landlord.
- Maintenance fees: In a NNN investment, the teanant handles all maintenance. this includes, roof, structure, parking, and all general upkeep of the building.
- Rent: Triple net leases often have contractual rent increases built in, this usually accounts for inflation and help you, the NNN investor in the long run.