Traditional investments like bonds yield low returns. While they are relatively safe investments, they can make you poor while your neighbors get richer. Net lease properties, on the other hand, are higher-yielding alternatives that do not only provide a higher return on capital but in some cases appreciate as well.
Investing in a Net Lease Property offers several important benefits compared to traditional investments like bonds. That’s the topic we’ll be exploring today. So sit back and enjoy the read!
I’m sure you’re familiar with owning rental properties. Maybe you’ve even bought one recently, or are looking to get into the real estate investing game. And if that’s the case, you’ve likely considered buying a net lease property, right? If you haven’t tried your hand at this type of investment, it might seem like a weird way of owning real estate. And even if you want to invest in net lease properties, some questions need answers before jumping in.
What is a Net Lease Property?
A Net Lease is a form of commercial real estate where the tenant is responsible for paying all property taxes and operating expenses, leaving the landlord with minimal financial obligation. It is essentially a long-term rental agreement. The term “Net” is used to indicate that the tenant pays for only the cost of the building and not for any other expenses incurred by the landlord. This can include repairs, utilities, insurance, and maintenance. All of these costs are included in the rent amount that the tenant pays.
Treadwell’s Net Lease program allows us to offer you this type of leasing program without any credit or background checks required. As long as you have an existing business, an existing lease, and a steady income, you qualify! nnn properties for sale. High net worth individuals and families are looking for properties for sale with nnn properties for sale.
Here are some of the benefits of Net Lease Property
Investing in net leased properties is a long-term strategy that provides a stable and reliable stream of income for the investor. While many people invest in bonds or other traditional investments, net lease properties provide much greater benefits to the investor.
Here are four reasons why investors should consider investing in net lease properties instead of traditional investments like bonds:
Income Inflation Protection
Net lease properties have Rental Escalation Clauses built into the lease which protects the investor from inflation. The clauses stipulate that the rent will increase by a fixed percentage every year giving the investor additional purchasing power as prices rise over time.
No Management Required
Net lease properties are fully managed by the tenant/operator who is responsible for all aspects of property management including maintenance and repairs giving investors freedom from the day-to-day activities required to manage a typical investment property triple net properties for sale.
Tenant Credit Quality
Net leased properties typically have tenants with strong credit ratings (i.e., A+ or better) providing investors with an added layer of security given their ability to service their debt obligations and continue paying rent even during difficult economic times, unlike most traditional investments like bonds.
Why investing in a Net Lease property is better than bonds?
There are several reasons why investors choose to invest in Net Lease. I thought it would be helpful to discuss the positives of investing in a Net Lease property vs. bonds. While there are plenty of different investments available, the following are just a few reasons why investing in a Net Lease property is better than bonds:
- The income generated from a Net Lease property is taxed as ordinary income, not capital gains.
- The money that you put into the property is considered an equity loan, which means you will receive depreciation on the building and all of your equipment. This depreciation can help reduce your taxable income.
- There is no risk associated with purchasing a Net Lease property because you are only responsible for maintaining the building and paying taxes on it.
- You will have no issues if you want to sell the property because you have ownership of it for the full term.
- With bonds, the amount of return on investment is subject to how much interest rates go up or down, which means that there is more risk involved in this investment option.
- With Net Lease, there is an abundance of qualified buyers looking to purchase a lease commercial building, whereas with bonds fewer people are interested in them.
When it comes to investing your money, you can’t go wrong with investing in a net lease property
There are several types of net lease properties, but they all have unique characteristics. Most of them involve a tenant who is responsible for paying the taxes, insurance, and maintenance costs of the property, while the owner covers those costs and charges the tenant a percentage of the profits for his or her trouble.
Net lease properties generally offer low risk and higher returns than other types of real estate investments, like stocks and bonds, which means that they can be an excellent addition to most diversified investment portfolios. This property is a triple net lease for sale. A triple net lease means the tenant pays for property taxes, insurance, and maintenance.
Unlike some other types of real estate investments, net lease properties have low operating costs, because they usually carry little or no debt. Those same low operating costs mean that tenants have little incentive to break their leases, which means that you’re less likely to lose your investment if you invest in net lease properties.
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