Net Leases and Investments.
Depending on where you live and the polices affecting the area that you are in real estate could entail a lot of things. Net lease is a type of real estate lease where the tenant pays the landlord the rent as well as part or all the costs that are associated with maintenance, operation or usage of the property. The costs could be taxes, utilities, property management fees, trash collection and in other cases janitorial services.
The costs are broken down into three categories which are maintenance, insurance, and taxes. There are different kinds of leases and if you are looking to invest in a market that has active net leases, it would be wise to understand the different leases. Single a neat lease is the first category of net lease, where the tenet of the property will cover the rent and the taxes on the property and nothing more. The next category, double net lease, sees the tenant pay the insurance [premiums of the property in addition to the rent and the taxes on the property.
The third category or the triple net lease has the tenant paying the rent and all other costs that are associated with the property. Single net lease are not that common in the market because the tenet has very little risk on their shoulders as they cover only the taxes. In covering taxes in the single net leases a landlord might state their wish of the tax payments to go through them so that they can make sure that the tent meets the payments on time and that they pay them in full.
As an investor you need to be aware that the net leases almost always favor the landlord. It is possible to negotiate them and one should consider doing so . Negotiating the leases is a wise move because you will be liable for the rent and the extra expenses regardless of whether your business is suffering losses or doing well.
Ideally the rent before the percentage of the usual cost should be less than it would be if you were to in a standard lease agreement. Everything falls on the research that the investor carries out, in consideration to that of the business, the details in the net lease need to be well evaluated before taking them click here. The most common alternative to net leases is a gross lease where payment is a flat agreed upon amount per month.