Depending on where you live and the polices affecting the area that you are in real estate could entail a lot of things. Net lease is a type of real estate lease where the tenant pays the landlord the rent as well as part or all the costs that are associated with maintenance, operation or usage of the property. Some of the usual costs could involve the taxes that are associated with the property, janitorial costs, property management costs and also trash collection in some cases.
Taxes, insurance and maintenance are the three main categories that the net lease cost are put into apart from the rent. There are different kinds of leases and if you are looking to invest in a market that has active net leases, it would be wise to understand the different leases. The first category is the single net lease where the tenant is required to pay the taxes that are associated with the property apart from the rent. With the double lease the tenant pays the insurance premiums on the property, the property tax and the rent of the property as well.
The third category or the triple net lease has the tenant paying the rent and all other costs that are associated with the property. Single net lease are not that common in the market because the tenet has very little risk on their shoulders as they cover only the taxes. In covering taxes in the single net leases a landlord might state their wish of the tax payments to go through them so that they can make sure that the tent meets the payments on time and that they pay them in full.
Having made the decision on to make an investment in real estate that has net lease, you need to approach the market with a mentality that these leases will favor the landlord most times and learn more. As the investor you can negotiate the net leases and with the right information on how to go about them you need to consider doing so. The the main reason to consider negotiating the leases is because you will have to pay them regardless of your business doing well or suffering loses.
The an investor needs to check the rent and ensure that before the percentage of the usual cost rent should be less than it would be if the owner was looking at a standard lease agreement and discover more. This all points to one thing, research an investor will take a risk only when they are assured that the risk is worth taking, with the same intense research they need to understand the details in the lease . The most common alternative to net leases is a gross lease where payment is a flat agreed upon amount per month.