Intrepid short sale investors searching for new ways to expand their portfolio are increasingly turning an eye toward retail and other commercial properties. Key to their success is the concept of Triple Net Lease; plain and simple...they are the life blood of the investment sector as they continue to outperform nearly all other comparable assets and generate double digit returns.
Triple Net Lease Defined
Unlike a standard lease where the property owner pays for required maintenance, taxes and insurance a triple net lease removes these major expenses from the equation by making the tenant assume full responsibility. Not only does this result in enhanced appreciation but generated income is substantially higher since taxes, insurance and maintenance remain the most costly expenses associated with any property.
What Type of Properties Qualify?
A triple net lease can be negotiated for nearly any type of commercial property but is commonly used in conjunction with retail, manufacturing and professional office space where the tenant may require extensive modifications of the space.
Savvy real estate investors interested in pursuing a long term approach (or searching for ways to maximize the attractiveness of an income producing property in anticipation for a resale) would do well to look into starter properties that could be used for physician offices, retail outlets and even major manufacturing. Remember, these are long term leases with an emphasis on tenants that rarely relocate.
Finding Triple Net Properties
Don't listen to the naysayers who try to tell you it is impossible to locate a triple net property via short sale. Here are a few facts to keep in mind; due to the global recession and economic downturn, the commercial sector as a whole has experienced nearly 40% decline...triple net leases have held their value to a better extent but have still declined in value by nearly 15 percent or even more in some hard hit areas of the nation.
Benefits Galore
In addition to appreciation and enhanced income opportunities, a triple net lease tends to attract the most financially stable and least mobile types of tenants. Without maintenance, taxes and insurance to deal with, owners literally sit back and collect the cash. With the recent influx of short sale commercial properties hitting the market, now is the time to take the next step.
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See you at the top!
Martin Crawford
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