A Triple Net Lease is perfect for long-term leases!

Triple net lease can be defined as a lease in which the lessee is responsible for paying the lessor not only the lease payment, but also the insurance, taxes and maintenance expenses that may occur from the daily use of the leased property.

A triple net lease has been used for several years as part of the leasing requirements on larger properties. The triple net lease is used on larger properties because of the positive benefit of the lease agreement on cash flow, taxes and more. Nowadays, real estate agents are also using the triple net lease on smaller rental properties.

The triple net lease is consistently used on rental properties that are leased for a term period of two to six years. This includes rental properties that are small or large in size.

One of the major downfalls of having a triple net lease on a smaller property is that the owner of that property is essentially leaving the insurance of their rental property in the hands of the tenant. A tenant may experience financial problems and therefore have problems attaining insurance.

Also, with a triple net lease tenants have occasionally over insured the rental property and then committed acts of willful damage. When acts such as arson occur the owner of the rental property is not allowed to claim losses against the tenant or is given claim to any of the insurance money.

So there are both advantages and disadvantages to having a triple net lease. It is still common practice to have a triple net lease on a larger property.

There are several popular properties that participate in the triple net lease program. Some of these properties include well-known restaurants, department stores, banks and even post offices.

Some of the advantages of having a triple net lease for investors is the long-term lease contract. Some triple net lease agreements are for twenty-five years. Many of the larger properties that have triple net leases are part of Fortune 500 companies. A triple net lease property can generate a steady income level for an investor.

These are just a few of the many advantages of investing in properties that have a triple net lease.

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