With a global financial market that is known to be volatile at times, investors are often looking for a stable and predictable place to put their money. Similar to buying a bond, investing in triple net lease properties is one of the smartest and most reliable investment tools available today.
While we know this is a great opportunity for many investors, it can be confusing to those unfamiliar with commercial real estate or 1031 exchanges. Let our experts walk you through the basics of buying and selling net lease properties.
While triple net lease properties are typically considered one of the safest types of investments, there is always some level of risk associated with any type of investment. Inflation can cause problems if rent does not stay on track with market rates. The situation could be exacerbated if a tenant is into, or nearing, lease renewal options. NNN lease renewal options sometimes come with smaller rent increases. This lower rent, paired with long leases, could create a drop in yields.
The tenant’s credit rating, future profitability, and investment objectives are other factors that should be carefully studied before making large, long-term investments. Most importantly, negotiate carefully when looking to purchase a triple net lease property.