Shutdowns and financial hardships due to covid-19 are common these days. If you are a novice investor, you may have a lot of questions in your mind when it comes to investing in triple net or NNN. Is it worth the risk? Will it be a good investment in the long run? Before investing, you have no idea what’s gonna happen next or if your business will ride out the covid-19 wave and still thrive. You are not even sure if your bank will still lend you money for your investment. Is it truly safe to put your money in triple net properties for sale?
These are common questions that most investors ask nowadays. But there is always a silver lining even amid this pandemic.
This may come as a surprise but essential businesses are still thriving. This means these types of businesses are considered viable investments for investors to look into. Your bank can still lend you money for needs-based NNN tenants. Shops like 7-Eleven, Dollar General, CVS and other health clinics are considered essential and continue to operate. They generate increased sales and continue to thrive amidst these trying times.
Why Triple-Net Leases Are So Popular
In a triple net lease, it’s the tenant who pays the base rent plus insurance, property taxes and other maintenance of common areas. Although there are other types of leases used in commercial properties, the triple net lease is the most popular among investors.
If you want to know whether or not you should buy NNN properties and why it is popular, take a look at these top three reasons:
You will enjoy a consistent and reliable income.
Both the investor and tenants agree to the terms for the duration of the lease including any set rent increases. All of these are drafted in the contract to ensure that both parties are aware of the fiscal elements of the term without any unforeseen changes. If you are an investor, you will enjoy a consistent stream of income and sleep soundly while earning money. If you are the tenant, you are also guaranteed a known price for the term, making it a win-win agreement for both parties.
It has little room for problematic risks.
Thanks to the terms of the contract that both parties agreed upon, you won’t have to worry about repair, tax, maintenance and insurance concerns. All of these are left in the hands of the tenant. You won’t have to worry about any unforeseen costs and if you have to sell the NNN lease property, you can transfer your capital into a different triple lease net investment that doesn’t require taxes, thanks to a 1031 tax-deferred exchange.
Since the triple net is popular, they are received favourably by investors when you decide to sell. There are usually multiple bidders especially if the properties are located in a high-traffic area and have the longest leases. So think of these factors before you invest.
Enjoy low-maintenance upkeep.
This is something that you cannot find in single and double net leases. In triple net, the main responsibility of maintenance, insurance and taxes falls on the tenant for a locked-in term of 10 to 15 years. This means very little management is needed. This allows you to dedicate ample time to your other investments or interests. Smart investors don’t just invest in a business. With triple net properties for sale, they can sit back and relax while earning money. There’s little day to day management required so you won’t have to fuss daily or visit them regularly. Your investment will grow even as you pursue other interests or invest in a different niche, giving you more time for other investments that need hands-on involvement.
Why NNN Properties Are Good Investments
Its tradition of stability has proven it to be recession-proof. NNN properties are famous for generating a steady and reliable income with reduced risk to investors. Even during the Covid-19 pandemic, NNN leases are still highly favoured and preferred.
Investments in the commercial real estate that was already in place even before the COVID-19 pandemic will likely continue and may even accelerate. NNN assets are recession-proof and remain popular in both good and bad economic status, especially for those that belong to the necessity-based sector, quick-serve restaurants with drive-thrus.
Essential retailers are not going anywhere. So if you want to invest in triple net properties for sale, consider investing in essential businesses as they remain open and many of them continue to perform well. Take a look at dollar stores, gas stations, convenience and grocery stores because they are holding up pretty well. It is also worth noting that quick-service restaurants especially those that have drive-thrus in their locations are also on the rise, along with automotive, home improvement and hardware stores among others.
Think about Triple net properties for sale in Texas and locations as these have the strongest opportunity. Be wary when investing in non-essential businesses as many of them are closed for weeks and it may take time for everything to go back to the pre-pandemic status. Malls, entertainment-focused retailers, fitness centres and other service providers are seeing a decline in revenue. Tenants need to create a business plan that helps ease people’s worries about the virus and make them comfortable. This pandemic will have a long-lasting impact so better invest in essential and recession-proof businesses.
Stability During Uncertain Times
Nothing can be more frustrating in the investment market than an unknown future. Month after month, a new wave of coronavirus continues to plague the economy that is already hurting and fragile. But there is a glimmer of hope for NNN properties for sale. They provide investors with a steady income even in times of uncertainty.
If you are an accredited investor and wish to find out more about single tenant triple net leased properties for sale, visit our blog to gain more insights on the possibilities of NNN investment. Start generating passive and steady monthly income. Be informed, empowered and connect with reliable investors to help you find stable and long-term NNN investments.