Where there is immense financial uncertainty, many people look to venture into safe, predictable, and profitable investments. Although there is a myriad of choices, single-tenant net lease properties are one of the better investment choices. Many investors refer to such investments as corporate bonds combined with real estate investments, which are still relevant in today’s market.
What is a net lease?
It is a contractual agreement between a tenant and landlord where the tenant agrees to pay, in addition to rent, any other associated fees related to the property. Such fees may include maintenance and repair costs, property taxes, insurance, utility costs, and additional operating costs. Net lease agreements are the opposite of gross lease agreements, where the tenant has the responsibility of paying a flat rental fee while the landlord pays for all other associated costs.
Due to the additional costs related to net lease agreements, many landlords may agree to lower the rent payments. This is because the net lease agreement must adequately compensate for the risk taken on by the tenant from the landlord. Generally, the difference between a net lease and a gross lease must be considerable enough to cater to the unpredictable expenses associated with maintenance, insurance, and taxes.
Thus, the landlord offsets some rent money to reduce the headaches involved with maintenance and operation costs of the property. In turn, the tenant accepts the discount knowing that property costs may vary annually.
What are the different kinds of net leases?
Net lease agreements are a common tool among commercial real estate investors. They buy properties to receive the income, but they want to avoid the stress and headaches related to paying municipal taxes, arranging maintenance, and paying for other operational costs. As a result, property owners use net leases to shift this burden to the tenant, allowing them not to worry about the daily administration of their property.
Generally, there are three types of net lease agreements that primarily focus on the major expense categories: insurance, taxes, and maintenance.
Single net leases
These are agreements where the tenant agrees to pay one of the cost categories.
Double net leases
Also referred to as net-net leases, tenants who agree to this agreement have the responsibility of paying two or three of the expense categories. Generally, this means that the Landlord is responsible for roof, structure and parking lot.
Triple net lease agreements
Also known as NNN lease (net-net-net lease), this type of agreement provides that the tenant pays for all three cost categories. Generally, triple net lease agreements involve leasing a whole building to a single tenant for the long-term; usually, a minimum of ten years, and can go up to 25 years, often with a provision to increase the rent across the lease term.
Who is a net lease advisor?
As mentioned earlier, net lease properties are a safe, predictable, profitable, and long-term investment that offers plenty of benefits to tenants and property owners. Often, it is a daunting task to find an ideal net lease property from the available sea of property choices.
Additionally, some net lease properties may come with tenants already in place. In turn, new property owners must thoroughly read the contracts in place to understand their financial responsibilities once they purchase the property and enter the existing net lease agreements.
Due to all the technicalities involved in net lease real estate, most investors prefer working with a net lease advisor. A net lease advisor refers to a real estate professional with extensive experience and expertise in net lease properties. Such professionals often have a successful track record of guiding several property investors in the industry to find and qualify the best net lease property listings that align with their investment strategy.
They also assist you in net lease negotiations and financing and ascertain that you understand all the contract details before signing any deal. Net lease advisors ensure that their clients get the best investment possible with high rewards and low risk.
What services do net lease advisors provide?
Net lease advisors provide a wide range of services, which can be customized to meet your investment goals. Among their list of services include, but are not limited to:
Portfolio analysis: Often, your net lease advisor will go through your investment portfolio with you and guide you on the best net lease properties that will meet your investment goals best.
Property evaluations: Thanks to their years of experience and expertise, net lease advisors will provide valuable insight on property evaluations, helping you understand the potential profit a property may accrue long-term and understanding the worth of any net lease property aids in ensuring that you get the best price on your investment property.
Strategic insight and recommendations: Depending on net lease market values, trends, investment goals, and portfolio, net lease advisors will offer strategic insights and advice on which net lease properties are ideal for long-term investments.
Additionally, the Dollar General net lease property investments have been highly sought-after since the Covid-19 pandemic began. Thanks to its compressed cap rates, history of stable growth, even during recessions, and low entry requirements, many people have been looking to invest in
Dollar General net lease properties.
Generally, Dollar General is among the top net lease property choices during this pandemic period. The company has been growing steadily as it adds at least 1000 strategic properties yearly. As a triple net lease property seller, the company exhibits safe and stable investments through increased yearly sales and consistent growth, high return rates, and by providing recession-protected and needs-based consumer products and services.
Typically, Dollar General Stores offer a initial 15-year NNN lease agreement with multiple f5 year options. Their properties are perfect for seasoned landlords, first-time investors, and anyone looking for several strategically located properties throughout the US. It is also worth noting that their property prices range from $1-2 million, which is quite affordable for investors.
How I Work
Net Lease Advisory offers a variety of advisory services for my clients who own single tenant leased investments (NNN investments). Through my experience I provide cutting edge solutions with a focus on maximizing value and deliver the results clients expect. I am dedicated to purchasing and selling net lease investments and can assess the value of a property and uncover hidden opportunities to help your business.
In the modern market, I have seen some of the great opportunities in NNN property. I focus on real estate investments, including single and multi-tenant retail space, and office and industrial space. My expertise in the industry and ongoing study of the market means I understand the opportunities out there and make me an authority on investment real estate.
I cooperate with the brokerage community to ensure I can reach the broadest audience. This gives you access to opportunities my competitors might miss and to maximize value for clients buying or selling.
My skills in valuation can provide extensive collections of market comparable and research to help you determine if a property’s current value is worth your investment. I also take pride in my ability to communicate with you on a consistent basis and offer you an extensive marketing process that maximizes your opportunities.
I believe knowledge and ongoing education improve my team and is the continued key to the success of my clients. My goal is to ensure you are confident and able to make the most of the opportunities available to you.
My mission is clear—I want to maximize the value of your property and build long-term relationships. I make the most of my network of professional contacts, the internet, social media, and a global network of buyers and sellers. This enables me to provide the most comprehensive group of real estate investment tools available.
Before investing in any net lease property, finding a reliable and experienced net lease advisor is essential. With my years of industrial experience, market knowledge, research capabilities, and client-focused approach, I have a proven track record of the numerous clients I have helped close net lease property deals. I focus exclusively on acquiring and disposing of net lease properties in different locations in the country.
Likewise, if you are looking to invest in a Dollar General net lease property but you are fearful of market instability or do not know how to get it done, look no further; Arthur Nachman is here for you. With my industry prowess, I am confident that I will guide you to invest safely and wisely in a NNN Dollar General property, especially if you are willing to act fast. If you would like additional information on how I can help you, please contact me on (703) 864-2900.
Before investing in any net lease property, finding a reliable and experienced net lease advisor is essential. With my years of industrial experience, market knowledge, research capabilities, and client-focused approach, I have a proven track record of the numerous clients I have helped close net lease property deals. I focus exclusively on acquiring and disposing of net lease properties in different locations in the country, and I am located in Fairfax County, VA.