What if you find out that there is a way through which you can get rid of this burden? Yes, there is a way and it is known as ‘NNN lease investment’. You may have heard this term if you’re a real estate investor. So, what is it? ‘NNN lease’ basically requires the tenant to pay some or entire property expenses along with the base rent. Therefore, choosing a NNN property as your 1031 Exchange replacement property will not only ensure a steady flow of income but also remove the burden of property management from your shoulders.
‘NNN lease’ is a blessing for passive investors. Some investors don’t like to get exposed to the risks directly. Since the risk of paying property expenses is upon a tenant’s head, investors can enjoy 100% passive investment.
Investors can also enjoy the benefit of tax deferment on ‘NNN lease’ using a 1031 Exchange. A 1031 exchange allows investors to defer capital gains taxes upon reinvesting the proceeds, obtained from the sale of relinquished NNN property, on another NNN property. Since the proceeds obtained from the sale of the relinquished property is reinvested on another ‘like-kind’ property, the exchange qualifies for a 1031 exchange.
1031 Triple Net Lease properties makes sure that tenants don’t find the agreement biased. The base rent of properties leased under ‘NNN lease’ is comparatively lower than that of the properties leased under a gross lease. Therefore, even though tenants have to bear the burden of property maintenance, a lower rent makes it even.
Undoubtedly, every investment poses some risks to investors. However, in case of a NNN investment, threat of financial risk isn’t high, and there is no reason why shouldn’t invest in a NNN property.
For consultation and assistance regarding Triple Net Lease 1031 properties, you can call – 888-993-2835 or email us at info@1031xchange.com.
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IRC Section 1031, IRC Section 1033, and IRC Section 721 are complex tax codes; therefore, all the investors/clients/consumers are advised to consult their tax and legal professional for details regarding their situation on any kind of investment. There are material risks every investor should know, associated with investing in 1031 Exchange properties, Delaware Statutory Trust (DST) and any other kind of Real Estate Properties. The risks include tenant vacancies; declining market values; potential loss of entire investment principal; that past performance is not a guarantee of future results; that potential cash flow, potential returns, and potential appreciation are not guaranteed in any way; adverse tax consequences and that real estate is typically an illiquid investment. This material does not constitute an offer to sell nor a solicitation of an offer to buy any security. Such offers can be made only by the Confidential Private Placement Memorandum. Please be aware that this material does not replace the PPM.