What Is The Triple Net Lease?
Some may have some confusion as to why people even choose the triple net lease and what it's all about. Here's a look at how it works.
When you enter into the typical lease,
you are only responsible for paying regular rent payments for the right to occupy the property. All other expenses such as fixing toilets and repairing the roof fall to the property owner. When you enter into a triple net lease, the responsibilities are separated in a much different way.
With this lease structure, the renter is required to pay for a lot of the expenses that other types of leases require the property owner to pay. Since this makes renting the property more expensive, this type of agreement often comes with much lower rent prices than would otherwise be granted.
Besides the usual rent payments, the renter in this type of lease must pay for three other expenses on a regular basis: insurance, taxes, and maintenance or upkeep expenses.
This may seem like a bad deal for the renter, since they will have a lot more responsibility for property that they do not own. It is typically used in the case of relatives or friends occupying and caring for the property of someone they know. A lot of landlords that live quite a distance from the property may opt for this agreement as well.
For some reason, the landlord in this agreement does not want to keep up with the property, or for some reason is unable to do so. It is basically easier or potentially cheaper for them to allow the renter to take care of the property in exchanged for a reduced rental rate.
If you are considering a Triple Net Lease for a property you want to rent, make sure you look into the expenses that you will be responsible for. You must know how much the taxes typically run and what the rental insurance will cost. Also, you have to inspect the property so you know about any expensive repairs that may be needed after you sign on that bottom line.
