Article Categories
» Arts & Entertainment
» Automotive
» Business
» Careers & Jobs
» Education & Reference
» Finance
» Food & Drink
» Health & Fitness
» Home & Family
» Internet & Online Businesses
» Miscellaneous
» Self Improvement
» Shopping
» Society & News
» Sports & Recreation
» Technology
» Travel & Leisure
» Writing & Speaking

  Listed Article

  Category: Articles » Business » Article
 

Triple Net Lease: Own A Property? Get The Maximum Out Of It!




By Christine Macguire

A triple net lease designates the tenant or lessee as being solely responsible for bearing all the costs related to the asset being leased. The landlord and the tenant come to an agreement where the tenant agrees to pay all taxes, insurance and miscellaneous expenses on the property in addition to any normal fees that are expected under the agreement. The concept of Triple Net Lease has been very popular in commercial building leasing because it reduces the owner's need to worry about spending time and money for monitoring property conditions and providing maintenance.

The basic idea of a net-net-net lease is for the lessee to assume responsibility for all property's expenses, both fixed and operating. The concept is well accepted and employed in all traditional sale-leaseback transactions for long-term lease of larger properties. Both the owner and the lessee agree upon a lease document stipulating that the tenant bears the operating responsibility for the property. In recent years the triple net lease has become increasingly popular for leases of smaller properties. While there are many versions, triple net typically includes Taxes, Insurance, and Maintenance (TIM).

In a triple net lease, the rental component is separately identifiable in the lease, making the actual net investment return clear for property owners and investors. Unfortunately there are several pitfalls for the smaller property owner in regards to leaving the insurance of their building to the tenant. The tenant may willfully damage the property in order to claim insurance while experiencing financial troubles. In such a situation the owner will lose all claim to the insurance and has no fall back to claim losses against the tenant.

Most triple net leases require the lessee or tenant to cover costs to maintain the roofing, heating, etc.- practically anything related to the building that can wear out or be damaged during the lease period. If you are in a triple net lease agreement you will be excused of all property taxes and property insurance liabilities. You will be responsible for paying your utilities directly. You can budget your personnel expenses and costs for routine maintenance and secure a quote for a maintenance contract.

There are a number of important issues to be considered before entering into a triple net lease agreement, including cost of capital, future operating performance and relationship with the building. All parties in a triple net lease arrangement need protection against surprise expenses that can occur as the facility ages and components wear, requiring maintenance and eventual replacement. Some owners reduce their risk by establishing a reserve fund into which each tenant makes regular payments. The owner then covers property maintenance costs as needed from this fund. As tenants come and go, the maintenance fund is constantly replenished—with no surprise burdens for a single tenant or for the owner.

A triple-net lease via a 1031 exchange allows the investor to get even higher returns by deferring his/her taxes and thus increasing the overall internal rate of return. Various companies provide you with a quality selection of triple-net leased properties that are ideal for 1031 like-kind exchange investments. It is believed all interests are best served by regular inspections performed by independent professionals with extensive experience and expertise in evaluating and reporting on building conditions.


 
 
About the Author
Christine is an expert Internet marketing professional with years of experience in various industries such as: Business, Finance, Real Estate, Web-Design and many more.

1031 exchange

Article Source: http://www.simplysearch4it.com/article/35806.html
 
If you wish to add the above article to your website or newsletters then please include the "Article Source: http://www.simplysearch4it.com/article/35806.html" as shown above and make it hyperlinked.



  Some other articles by Christine Macguire
Corporate Branding: A High Priority For All Companies
The great gurus of the business world have understood that if you want to communicate a powerful idea, you may do better by a visual representation than by spinning abstract representations. Visual representation of a ...

Bank On Your Future And Purchase The Car Of Your Dreams
How exciting—you're about to pick out a brand new car! You are just waiting to get into the drivers seat and ...

Lycopene: The Colorful Weapon To Fight Cancer
The new adage of the century has been "A glass of watermelon juice a day keeps the doctor away". Highly contested ...

BBuy An RV And Hit The Roads For a Journey Of A Thousand Miles...
"The traveler sees what he sees. The tourist sees what he has come to see." For those who love to travel ...

A Good Logo Design: Recipe For A Successful Business
"The success combination in business is: Do what you do better... and do more of what you do..." They say, if you don't do it excellently, then don't do it at all. A ...

Honeydew Melons: Savor The Tastiest Fruit Snack
"If honeydew is ripe, then it is the king of all melons". Honeydew melons are considered to be more 'melony' and tastier than cantaloupe watermelon or any other variety of melons. One of the most ...

  
  Recent Articles
Record Management
by Ismael D. Tabije

Treasure Hunts
by John Tarr

What to Look for in Choosing IP Surveillance Software
by amit

Giving Your Business a Vision Others Can Envision
by Yvonne Weld

Productivity and Production Management
by Ismael D. Tabije

FDA Registration of Food Facilities
by Russell K. Statman

Why Businesses Today Fail - Part 1 Customer Service
by Jeffrey Solochek

Utilizing a Virtual Assistant is Just Good Business Sense
by Yvonne Weld

The Quest For An Auto Dealer
by Ashley Daniels

The Importance of Coaching
by Ashley Daniels

Finding The Right Business Investment
by Jason Sands

Commercial Flooring NY gives your office a professional look
by Stephen robins

Can't connect to database