Since NNN properties are relatively lower risk, most investors find it a viable commercial real estate investment to generate a steady stream of income. Triple net lease shifts the responsibility of payment of property expenses to the tenants while the landlord’s role in property management is reduced.
Investors find these low-management real estate investments particularly attractive. If you are looking for NNN for sale, here’s what you need to know before investing.
NNN Properties For Sale: 5 Things Investors Need to Know
Triple net lease for sale benefits a landlord with few overhead costs and minimal responsibility for property management. In contrast, tenants will be liable to pay property taxes, insurance contributions, and maintenance expenses.
A real estate agent must exercise due diligence before investing money in any kind of property. Take into account the following factors before investing in NNN properties.
Rental Income
NNN property owners receive a monthly rental income in addition to the payment of property expenses. Therefore, rental income should be evaluated before finalizing the purchase of a property.
Usually, rents for NNN are not as high as some other real estate investments as the tenant is paying additional expenses. High-yield NNN properties located in densely populated areas promise a higher rental income.
Location
Location is a key factor to consider when investing money in net, net, net properties. Well-located NNN properties are easier to rent at an appropriate price.
Population Density – To maximize rental income and profits, invest in a property located in a well-populated area that offers unlimited opportunities for business expansion.
- Economic Growth – If the area does not have a high employment rate or healthy economy, the return on investment would not be as high as anticipated. Consider tenant demands and turnover rates before choosing a location.
Property Type
Investing in the right NNN property type is essential to increase profit. Not many people know, each N in NNN property represents a property expense. Generally, investors have the option to invest in a single net lease, double net lease, triple net lease, or absolute net lease.
Accessibility
Consider traffic counts, the volume of visitors, visibility, and accessibility of the property. Despite being visible, some properties are not easier to access due to cuts and curbs.
Sometimes, renters need a minimum parking ratio, therefore, easy accessibility and excess land give the tenants options to expand or subdivide the land to construct or rent the additional building.
Purchase Price
Determine the budget for the NNN property to ensure that the price tag matches the budget. Unquestionably, it will require higher capital to invest in NNN real estate. Buyers have the option to apply for a mortgage to purchase the property.
Final Thoughts
Irrespective of the fact that NNN properties are low-risk, investors have to be careful and exert time and effort to determine what kind of NNN property would yield more profits. All investments carry risks, however, when done rightly, it is a viable investment opportunity. Consider the aforementioned factors before placing money in a triple net (NNN) property.
