Benefits of Investing In NNN Properties When Doing A 1031 Exchange

Benefits of Investing In NNN Properties When Doing A 1031 Exchange

The management of an investment property could become painful as time passes. A property’s management becomes more complicated as it ages, requiring the investor or owner to invest more time and money in it. Investors often choose to sell their investment properties rather than continue to manage them due to the ever-increasing burden of property management. The time has come for investors to do their research and develop an investment plan that will reduce their burden of property management but will also yield greater returns than what they were getting from the relinquished property. The benefits of NNN investments are numerous. Investments in TICs are also an option. In TICs, you and other investors co-own the property. If you would like to learn more about TICs, you can contact an advisor who specializes in NNN 1031 exchange properties.

1031 Exchanges

Property management is no longer necessary with Triple-Net Lease.

NNN or triple-net leases are single-tenant agreements that require the tenant to shoulder the cost of necessary property expenses rather than the investor. The tenant pays all expenses associated with the property, as well as his base rent, under a triple-net lease. In contrast, the property owner receives a regular flow of income without incurring any expenditures on property maintenance. It is possible to invest in NNN 1031 exchange properties in a few different ways. Investing in NNN properties can be done directly or by using your 1031 exchange net proceeds. To make a wise investment decision, you need to learn as much as you can about NNNs before making a final decision.

What are the biggest benefits of triple net property?

Predictability

Net leases have a known structure at the time of signing.  The lease terms are known to both parties at the beginning of the agreement. As a result, it is easy to determine what the rental income or payment will be in years 1 through the end of the term. Both parties are aware of all rent increases. In the absence of a default or bankruptcy by the tenant, investors are guaranteed a reliable income stream.

Stability

Investment-grade tenants are less likely to default on lease payments and rent in long-term net leases. As a result, it is easier to determine the profitability of the lease and the ability to sell the property for a profit and capital return. In the case of a smaller tenant, payments may be missed or late, whereas, in the case of a national tenant with a corporate-backed lease, payments will be made on time and obligations will be met. Strong tenants on long-term leases provide downside protection in a downward market that is unavailable to local or regional tenants.

Simplicity

The management of a net lease is simple, which is a great advantage. Other than structural maintenance, the landlord usually does not have to perform many services under a NNN lease.

Neither structure requires day-to-day management, so you can benefit from real estate ownership without the stress

With NNN investments, you can do a 1031 exchange…

After learning about NNN investment, it’s time to learn how to exchange your old investment property for a NNN property using a 1031 exchange. An exchange 1031 can be used to exchange any investment property for an NNN 1031 exchange property. Here are the steps:

  • List your investment property for sale
  • An exchange agreement should be entered into with a QI.
  • Within 45 days, identify different NNN property options.
  • Within 180 days of your 1031 exchange, buy the same property you traded for.
  • In addition to the other documents required, submit form 8824 to the IRS when filing taxes.

This is how you can invest in NNN Properties when doing a 1031 exchange.

“Our tax-deferred 1031 exchange programs can save millions in taxes, increase investor equity, and compound annual cash flow distributions and returns”