In the long-run, a triple net lease for sale can be a reliable source of income, given that you own the proper:
- Locations
- Lease
- Tenant
- Ownership
- Asset
In this article we discuss in detail how each of this prospect influences your investment in a triple net lease for sale.
Location
The two foremost qualities of a right location are tenant demand and replace-ability. Oftentimes, NNN lease investors rely heavily on the primary tenant and overlook the prospect of an attractive location. A better investment decision is nevertheless made only in combination with a reliable tenant and good location. Although investing in a location high on demand can be quite expensive, in the long-run, it will give you relief because of its ability to replace tenant easily.
Asset
Asset plays another crucial role in drawing the course of your investment in a triple net lease for sale. The right asset should come with the convenient conditions. In real estate, remarkably, condition and cost are separate from each other. If you have to spend too much on a real estate location in one of the most desirable places in the city, the decision, by no mean, is rational. As well as that, specialized properties are bound to meet only a specific clientele’s requirements; making them vulnerable to any upside down in the financial market.
Tenant
A good tenant either makes or breaks it for you. The ideal candidate would maintain a foolproof credit record. It indicates the tenant’s reliability even in the face of harsh economic conditions.
Lease
Analyzing the terms of a triple net lease for sale is as important as the right tenant and location. The ideal lease term will have an extended period of agreement, to ensure stability. And it will be devoid of any terms that allow room for a premature termination of the contract.
Ownership Structure
Different ownership structures are there to accommodate your need. But, mostly, we recommend leased fee ownership and fee simple ownership. They are by many degrees better than owning only the improvements on a ground lease.