Depending on where you live and the polices affecting the area that you are in real estate could entail a lot of things. When it comes to net lease in real estate, a lessee covers all or part of the costs that are associated with the maintenance, operation and using of the property in addition to the rent of the property. Some of the usual costs could involve the taxes that are associated with the property, janitorial costs, property management costs and also trash collection in some cases.
Taxes, insurance and maintenance are the three main categories that the net lease cost are put into apart from the rent. Net lease co9me in three basic types and as a new investor you need to understand them before you venture into a market that features all of them. The first category is the single net lease where the tenant is required to pay the taxes that are associated with the property apart from the rent. 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.
NNN or the net-net-net lease is the third type of net lease and with this one you are required to pay the rent and cover all the expenses that come with the property , this favors the landlord. With a single net lease the tent has very little risk passed on to them as they are only covering the taxes, these net leases are least common in the market. As much as the tenant is only paying the taxes in the single net lease, some landlord will ask the payment to go through them so that they can keep track of the taxes and certify that none has been missed.
As an investor you need to be aware that the net leases almost always favor the landlord. As the investor you can negotiate the net leases and with the right information on how to go about them you need to 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.
The rent before the percentage of the usual costs should be less than being in a standard lease agreement. The investor needs to do well-informed research on all the details that are in a net lease in consideration with all other aspects of the business to have a complete picture of whether the whole thing is a worthy undertaking. The most common alternative to net leases is a gross lease where payment is a flat agreed upon amount per month.