What is triple net lease example?

What is triple net lease example?

A triple net lease is an agreement between a property owner and a tenant where the tenant pays property taxes, insurance premiums, and maintenance upkeep and repairs, in addition to a monthly rental fee of the building or space.

What is included in NNN lease?

A triple net lease (triple-net or NNN) is a lease agreement on a property whereby the tenant or lessee promises to pay all the expenses of the property, including real estate taxes, building insurance, and maintenance. These expenses are in addition to the cost of rent and utilities.

How is NNN lease calculated?

Calculating a Triple Net Lease Triple net leases are calculated by adding the yearly taxes on the property and the insurance for the space together and dividing that amount by the building total rental square footage.

How does a NNN lease work?

On an NNN lease, tenants pay additional expenses in addition to the lease fee, to the landlord or lessor. The landlord includes the totals for property taxes, insurance, maintenance and common area upkeep and then divides the sum by 12 to arrive at a monthly cost.

Is a triple net lease bad?

Drawbacks to a Triple Net Lease There is an inherent danger in using a triple net lease with regards to the unknown. Unexpected and substantial damage to the property could significantly increase your monthly maintenance and repair costs.

Who pays utilities in NNN lease?

A triple net lease (NNN) is a lease agreement between a landlord and a tenant or lessee on a property where the tenant agrees to pay property expenses including real estate taxes, building insurance, and maintenance fees. These expenses are in addition to rent and utility expenses.

Is a triple net lease a good idea?

The most obvious benefit of using a triple net lease for a tenant is a lower price point for the base lease. Successful properties with low vacancy rates also make triple net lease attractive for a tenant as the taxes, insurance, and maintenance costs are divided by a greater number of fellow tenants.

Is NNN lease a good investment?

NNN leases are considered to be one of the most secure investment opportunities. This is because, similar to bonds, single-tenant net-leased properties provide steady and predictable returns over time.