Things You Need To Know Before Buying Triple Net Lease Properties For Sale In Henrico Virginia
Many real estate investors believe that investing in a triple-net-leased (NNN) property is the simplest option. While simple to acquire and maintain, triple-net-lease buildings can be a difficult type of property investment for those who are new to it. Given that lease durations can last for up to 50 years or more, all relevant information must be thoroughly investigated before investing in Virginia NNN Real Estate.
Investors must understand all important aspects of a triple net property to avoid expensive mistakes while purchasing. Only then will an investor be able to find NNN Properties in Henrico, Virginia that is worth investing money in. Here are some key points to remember regarding triple net investing.
What Is A Triple Net Lease?
Triple net lease entails insurance, real estate taxes, and common area maintenance (CAM) required throughout the lease period. When a property is leased, the tenant is responsible for any of the obligations outlined in the lease.
The owner’s sole responsibility is to collect the monthly rent throughout the lease. They are not required to do any maintenance or repair on the property.
Advantages of Owning A Triple Net Leased Property
Here are some of the numerous advantages of purchasing triple net lease properties for sale in Henrico Virginia.
- Steady Flow Of Income
Long-term lease arrangements are common in triple net leases. Thus, 10-25 year durations are common.
After a tenant pays for all of their expenditures, the property owner receives their rent in full. As a result, it provides a steady stream of income that isn’t affected by unanticipated increases in operating costs and capital expenditures.
- Reliable Tenants
In many cases, major corporations prefer to keep their capital rather than purchase property since it is more practical for a national business. Hence, their preferred leasing option is a long-term, triple-net lease.
This revenue flow enables these corporations to spend more on other crucial aspects of their operations that may involve acquisitions, debt reduction, or redirecting cash to more profitable uses.
It does not imply risk-free investing, but the multiple numbers of reliable corporate tenants may be advantageous to triple net investors.
- Rent Increases
In addition to the stable flow of income guaranteed by a triple net lease, investors can anticipate incremental rent increases as years go by, which serve as a protection against inflation. Rental increases are included in triple net leasing arrangements. Hence, the flow of revenue generated by the property tends to increase gradually over time.
- Hassle-Free Management
Maintaining a property is the tenant’s responsibility under a triple-net lease arrangement. Thus lowering the time required for the manager of the property to perform the same task.
Several investors in real estate find it the most valuable benefit. Due to this one factor, investors may reap the rewards of ownership without having to deal with any management issues.
- Favorable Location
It’s common for triple net lease properties to be situated where many customers can easily access them. As a result, it would be simple for triple net investors to find a new tenant when their lease ends. In addition, because owning a NNN investment has low to no responsibility, it is much easier to buy properties anywhere.
Disadvantages of Triple Net Ownership
Even though triple net leases offer substantial advantages, they must be evaluated while considering the risks of investing in real estate with this type of lease. Like any other real estate investment, a triple net leased property has its own set of potential drawbacks.
- Vacancy Risk
Most triple net-leased buildings have only one tenant, which increases the risk of vacancy. The property is either occupied or unoccupied at any given time. If a renter chooses not to renew their lease, rental revenue might drop to zero overnight.
- Re-Leasing
Many triple net properties are sold close to the expiration of a long-term lease, passing the responsibility of re-leasing the building to the succeeding property owner.
If the new owner lacks the necessary expertise or doesn’t have a competent property manager, this might pose a significant tenant rollover risk.
- Tenant Neglect
Because the tenant is in charge of the upkeep, there is a possibility that they may not handle it well to meet the property owner’s expectations.
For instance, a long-term renter may conclude that they don’t need to make a necessary repair since they can operate with a minor issue. When a renter moves out, that issue may have grown into something much more serious. As a result, the owner would be in charge of making the repairs.
How to Invest in Triple Net Lease Properties For Sale In Henrico Virginia
Numerous options exist that allow property investors seeking passive income and low-risk investments to get involved in the market. Triple net lease investments can yield different returns depending on the location, tenant, landlord obligations, and duration left on the lease. As a result, two ventures with the same tenancy might have different rental rates.
As an investor, you should decide what type of return is most important to you before taking a step toward your investment. After deciding, search online for triple net leased properties on Virginia’s NNN property listings that may be of interest. You can invest directly in a property, publicly listed real estate investment trusts (REITs), and the likes.
Before considering your options, it’s good to conduct some research and speak with a triple net lease expert beforehand to ensure the prospect is in line with your tolerance for risk and time frame expectations.
Once you have collected enough information on possible investment options for triple net properties for sale in Virginia, it would be useful to keep everything together. As a result, you can conveniently access it anytime you need to discuss it with your property manager or partners.
After selecting a triple net property, have your trusted real estate professional create a letter of intent to acquire it.
Final Note
NNN properties are the best choice for those who don’t want management hassle but want regular income from their investment. This type of property can be an excellent real estate investment for the appropriate kind of investor. Nonetheless, like with any other investment, the amount of time and work you are willing to put into your investment is entirely up to you.
