Single-Tenant Triple-Net property (also known as “Net-Lease”, “STNL” or “NNN”) is a property that is leased to one tenant with a lease structure in which the tenant is responsible for all property-related expenses (including property taxes and property insurance), leaving the landlord with no management or maintenance responsibilities.  NNN properties are a popular choice for individuals who wish to invest in passive real estate, but may not have the time or desire to actively manage a property.

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Most NNN properties feature long-term leases.  These properties often have new lease terms of 10 to 25 years and typically provide multiple lease renewal options.  The length of the lease and the simplicity of dealing with one tenant make these investments attractive to investors who lack the time or real estate knowledge.

 

Most NNN properties involve Fortune-500 company tenants who guarantee the leases.  While dealing with “mom & pop” tenants involves risking late rents or a failing business and space vacancy as a result, having a Fortune-500 company as a tenant will ensure rent payments on time for the duration of the lease term.

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The return on investing in NNN properties is superior to other alternatives, including rental homes and multi-family investments. While the returns on rental homes is unknown, due to the possibility of necessary repairs or evictions, NNN properties income is guaranteed and will never adjust.

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While investing in Multi-Family properties includes painful management responsibilities, NNN properties can provide a painless, passive investment with long-term predictable cash flow.

 

NNN properties are attractive options in 1031 Tax Exchange transactions.  Under the current tax law, when an investment property is sold, the owner will have to pay a hefty tax on his proceeds, called “Capital Gain Tax.”  Using a 1031 Exchange, a seller can defer his tax payments by purchasing a similar property within a time frame.  NNN properties are a good choice as they are more affordable and can be managed easily, unlike multi-tenant shopping centers or apartment buildings that involve extensive site investigations and management responsibilities.

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Single Tenant NNN investments are high returns properties with ease of management. The investor invests in a long term lease that is backed by a strong company with absolutely no maintenance responsibilities. 

 

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