Triple Net Real Property Lease
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Questions & answers
What are the three parts of a triple net lease?
In a triple net lease, op/ex consists of three main elements: property taxes, insurance, and common area maintenance (CAM) fees. In a triple net lease, your annual rental obligation, called gross rent, will be your base rental rate plus operating expenses.
What is a triple net lease structure?
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.
What is an example of a triple net 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.
Is a triple net lease a good investment?
Avison Young says that NNN leases are one of the most secure investment opportunities. With this type of investment, you will always have a steady income coming in with very little responsibility and risk.
What is the downside of a triple net lease?
Cons of Triple Net Leases For landlords who are locked into a long-term lease, they lose the ability to increase the rent if property values in the area increase. In the long-term, this can limit earning potential.
How do you set up a triple net lease?
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.
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