Triple Net Properties Require a Certain Kind of Investor

Nnn leasing

Nothing but net is a phrase that during March typically has everything to do with the NCAA basketball playoffs. For real estate investors, however, net, net, net, has nothing to do with anything that happens on a basketball court. Instead, triple net leasing refers to leasing options that tenants or lessees pay in addition to the lease fee, or, in some cases, rent to the landlord or lessor. The NNN investment fees include property insurance, property taxes, and common area maintenance.
Triple net investment opportunities offer both advantages and disadvantages, so it is especially important to make sure that you understand all of the implications. In fact, if you are not careful you can get yourself into a lease that exceeds your current budget. As the nation’s real estate market continues to increase in value, the temptation is for more and more people to invest in properties. NNN properties for sale are a big temptation, but they are not for the beginning investor.

Consider some of these facts and figures about the real estate industry and the impact that it has on the nation’s economy:

  • Spending on hotel-related construction increased 59% and office-related construction increased 43%, according to U.S. Census data that was gathered between December 2014 and December 2017.
  • 55% of millennials are interested in investing in real estate, the highest percentage of all demographics questioned, according to the Real Estate Investing Report.
  • Approximately 72% of commercial buildings are less than 10,000 square feet in size based on Energy Information Administration data.
  • Some $74.24 billion worth of commercial buildings were put in place in the U.S.
  • During the five years leading up to the year 2017, demand for commercial real estate industry services has grown, aided by the recovery of the overall economy. In comparison, between the 2012 and 2017, the industry experienced an annual growth of 3.9%.

Triple net leasing continues to be a profitable way for many investors to enter the real estate market, but it is important to make sure that you understand all of the implications of this kind of property. Like many investments, it is important that you seek advice before you make large investment decisions.