Triple Net Leasing As An Investment Strategy
For the previous years, triple net leases have been good news in the real estate market which has been a gloomy one. Even though this kind of investment has been in existence for quite some time now, it is only with the vast expansion of the big chains in the national scale as well as the demand for stand-alone retail outlets which has made it possible for the market to expand exponentially for real estate investors.
Originally, this form of investment was idealized to make it possible for credit worthy tenants to construct facilities to their exact preferences and requirements. At the same time, the firms were not obliged to tie up big amounts of their operating money or their borrowing capability to invest in the real estate as opposed to their core businesses. Following the construction of the building, the corporation could sell it to an investor who was willing to make a trade with a guaranteed long-term stream of income. This was in the absence of the common obligations of ownership for a reduced return. For the past few years, this concept has been used by retail shops to expand markets throughout the country and beyond the country rapidly.
As real estate of all kinds has not been performing very well for the past few years, this is among some of the few methods for investors to know with high certainty what their return will be for many years over a long period. The investor normally has three main uncertainties in that; the investor is not certain whether the rent payments will keep up with the inflation, what the residual value of the property will be after the lease term has expired and the long term financial well-being of the tenant. Learn more about investments at http://www.ehow.com/how_7648365_sell-house-investor.html.
To an investor, those three points are always of interest to any real estate investment regardless of whether it is Triple Net Gateway or not. With an increasing number of investors and firms exploiting the "NNN" concept, the market will witness an increase in the monetary losses for this segment. The investor ought to ensure that the tenant is capable of paying and the continuing requirement for space for the full term of the lease and option periods.
The tenant ought to have the means to besides making the rent payments, but also maintain the premises and make payments for the real estate taxes as well as the assessments. Know about Triple Net Gateway here!