Secure, guaranteed cash flow for 10, 15, or 20+ years
Buying NNN investment real estate that is NNN leased to credit, national tenants is widely regarded as one of the safest, most secure real estate investments. Unlike other higher-risk real estate investments, NNN properties offer stable, guaranteed cash flows that come in monthly.
Rent is paid monthly, like clockwork. And will be for the next 10, 15, or 20+ years of the lease.
Zero landlord responsibilities and zero cost exposure
As an owner of a NNN property, you will have ZERO management responsibilities and ZERO exposure to any unforeseen costs or expenses. Under most standard true triple-net (NNN) leases, the corporate Tenant is legally obligated to handle the payment and management of:
- ALL operating expenses
- Insurance
- Property taxes
As an investor, there are no hidden fees and NO OWNERSHIP HEADACHES! The corporate Tenant is solely responsible for maintenance, repair and insurance costs in addition to rent. There are no expense pitfalls as can be found in other types of real estate investments.
In many ways, owning an investment property NNN leased to a credit Tenant is like owning a corporate bond — with the additional benefits of real estate ownership:
- Leverage
- Depreciation
- Tax Savings
Leverage, depreciation, and tax savings
Owners of NNN properties enjoy the same financial benefits as all other real estate investors: leverage, depreciation, and tax savings. Leverage can allow an investor to use borrowed money to maximize cash flow in the shorter-term, or structure a longer-term loan for estate planning purposes. For NNN properties leased to Tenants with high quality credit ratings and solid financial standing, there are a variety of financing options available to investors. In fact, in today’s market, there are a wide variety of credit Tenants who are highly sought after by lenders, so borrowers are offered more favorable terms than are available for many other commercial property investments.
Depreciation of a commercial real estate investment provides most investors with very significant after-tax savings. In fact, the tax savings provided by depreciation are often the primary reason investors choose to allocate a portion of their net worth to real estate investments. NNN property, like all commercial property, is depreciated over 39 years, on a straight-line basis. However, for the savvy and sophisticated investor, returns may be enhanced by accelerated depreciation.
A great estate planning tool
We have found that the vast majority of NNN buyers are considering their longer-term, family estate planning when acquiring NNN properties with long-term leases.
- Secure, guaranteed cash flow for 10, 15, 20+ years
- Zero landlord responsibilities and zero cost exposure
- Leverage, depreciation, and tax savings
You are buying the best corner in town
Don’t forget that you are buying real estate! Generally speaking, when you buy a NNN property, you will be buying one of the best corners in town. National credit-worthy retailers are highly selective in their site selection criteria, and most new stores are located at “Main and Main” or in the primary trade corridor.
Each site must run through a gauntlet of corporate hurdles, including:
- Demographic requirements
- Traffic counts
- Cost, sales and profitability modeling
- Competitive landscape analysis
- Retail trade area concentration
The national credit tenants that guaranteed the rent on most NNN investments are corporations with long-term vision. They have a strategy and plan which they have executed well. A key component of that strategy is opening stores in locations that will be the most profitable. Remember, when these Tenants sign a leases to open a new location they are committing to pay rent at that location for the next 10, 15, 20+ years! As an investor, you can rest assured that each location has been thoroughly vetted by the corporation and, as a result, may be more likely to hold value, or appreciate with future development, than any other investment property.