Commercial real estate properties are a bit trickier to handle than the usual ones. The biggest reason is the amount of paperwork and formalities you have to go through. This often raises the need to consult a professional at each step. However, there is no harm in it, but this may take a toll on your time consumption and over-rated expenses.
There are many commercial real estate properties which require a modest amount of consistent management. In such circumstances, when you make up your mind to manage the property by yourself, you may end up spending a good amount of time handling the property transactions, tenants, and other property-related common issues for the long run. All such factors may make you hire a property management professional or team which adds to the expenses for sure.
So, what is the reliable solution to a steady source of income from your commercial property? Well, the solution lies in a triple-net lease.
What is a triple net lease?
The concept of the triple net lease is used for a certain number of properties, including – retail stores, offices, factories, and industries. Under a Triple net lease for sale property, the tenants are held responsible for the ongoing maintenance and other operational costs. This condition is settled in exchange for the long-term lease agreement.
Besides this, the tenants are supposed to pay insurance, taxes, repair work, and the structural components of the building. These expenses are different from paying the monthly or annual rental for the acquired property. Thinking why still people go for a triple net lease for sale property?
Well, there are plenty of reasons for the same. Here are some prominent ones explained for your better understanding.
It offers long term association –
Triple net comes with long-term collaboration chances, which don’t leave you in the ambiguity of how soon the tenants will leave. Here, the lease collaboration lasts for at least 10 to 20 years approximately. Many cases may offer five-year lease renewal options, but it’s no lesser than that. As a result, the commercial property owner enjoys a steady flow of income for the long run.
Improved terms on property loans –
Whether you are approaching a private or government bank, commercial real estate holds better credibility for better property loan terms and conditions. This works as a reasonably stable investment with some additional benefits like – lower down payments or mortgage rates, and much more. This is why most commercial real estate property lenders see it as a beneficial investment that comes with minimal risk features.
Moreover, triple nets are liquids, which makes them easy to sell whenever the owner feels like. However, it should be notified in advance.
Conclusion –
When dealing in commercial real estate properties, everyone prefers to play safe and handle the paperwork in a legit manner. From the legal formalities to seeking permissions, there are many steps to sail through when managing a commercial real estate property. Here, investing your time and energy in triple net lease properties works as the best alternative to cut the hassle and work smart.
