What To Consider When Investing In NNN Properties?

What To Consider When Investing In NNN Properties?

By | July 6th, 2022|Blog|0 Comments

Did you know that there are four types of net lease properties you can invest in? And while all four can become a steady source of passive income, triple net properties are perhaps your best bet.

Factually speaking, a triple net lease is a commercial real estate agreement where the tenant agrees to pay the monthly rent and other property expenses like maintenance charges, property taxes and other utilities. These other expenses are a part of a triple “net” which is usually paid by the tenant to the owner of the property on a monthly basis.

But, before you actually start your search for triple net properties for sale, there are a few factors you must keep in mind. And this article will help you select the right triple net property. Read on to explore the steps to select the right NNN property.

Determining Preferred Investment Returns

Based on the rent, location, build-up of the property, lease term and year of construction, triple net properties comes with a number of different investment returns. In short, two properties with the exact same tenancy and guarantee could come with different investment returns.

What we are trying to say here is do your own research before actually investing in a property. You must determine what type of investment you are looking for. If you are looking for a 5.5% cap rate, make sure not to settle for less. With a little bit of research and industry knowledge, you can find a property with your preferred investment returns.

Get In Touch With An Advisor

The alternative investment space is huge, filled with millions of investment options and technicalities. Therefore, it is best to get in touch with a registered investment advisor to invest right. That being said, it is recommended to get in touch with a triple net lease advisor.

A triple net lease advisor is a commercial realty broker with valid experience in NNN properties and would help you select the right pro[perty, perfect for your needs and referred investment returns. Make sure to ask a number of questions and choose a professional broker belonging to the commercial real estate sector.

Set Term Criteria And Tenancy

It’s true that certain triple net properties for sale might come with attractive investment returns. But, if you dig deeper, you must find that the current lease only has 4 years remaining. Moreover, when it comes to the tenants, you must also take a look at their creditworthiness and other financial documents to ensure that they would be able to sustain the expenses even if the new location isn’t a huge success.

Besides this, you must also consider the number of locations of that tenant. A tenant with only 7 locations won’t be a huge success compared to a tenant having 100+ locations. Therefore, you must set your tenant type and the term criteria before investing in an NNN property.

Finding The Right Lender

There’s no denying that triple net properties come with enticing all-cash offers. However, it would be really wise to find the right lending partner early on the stage.

This would help you during your underwriting and help you grab new opportunities.

Are Triple Net Properties Sound Investment?

Honestly, it depends on your priorities. Regardless, if you are searching for a safe bet to invest your 1031 exchange proceeds, looking for regular passive income and tackle almost all landlord responsibilities and expenses, triple net properties for sale are perhaps your best option. Just make sure to select the right property by getting in touch with registered investment advisors and emphasizing your preferences.

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