Tenants and landlords negotiate various types of leases on the commercial property. The most common styles include percentage, gross, and triple net leases. The gross lease is the complete opposite of the triple net lease. While many people wonder about the best type of lease when setting up their business- the best thing lies with considering your expectations and specific goals.
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Yes, selecting between different lease types doesn’t have to follow market trends. All you need is some basic knowledge, experience, and expertise. Now that you’re considering a Triple Net Lease agreement for your startup business, dwelling into a pool of knowledge seems like the most convenient option. And why not? It’s a crucial business decision.
What is Triple Net Lease?
A triple net lease isn’t as complicated as everybody assumes it to be. People also refer to it as NNN lease. A triple net lease is an arrangement wherein a tenant pays all or a part of the office space’s expenses. Note that these expenses are additional to the base rent. These ongoing expenses include building insurance, line items about property taxes, and maintenance costs. Now that you’re establishing your startup hub’s roots and looking for a Triple net property for sale, knowing some advantages may work wonders for you. Business owners consider this a lucrative option- all thanks to its benefits for both parties. This type of lease has a lower rent in comparison to gross or percentage leases. The lesser the rent, the easier it will be to find out the tenants. Thus, the chances for a vacant building are negligible.
What are the benefits of a triple net lease structure?
Commercial property investors and owners like the triple-net lease structure owing to some good reasons. These are:
- Tax Benefits:
Since the tenants (business enterprises) will be responsible for paying the property tax in a triple net lease agreement, they have the option of building their expenses into the business expenses. Doing so will enable them to achieve some tax benefits for their business enterprises.
- Lower base rent:
Since you’re a startup, you’ll want a lease agreement that saves money into your pockets. You’ll be responsible for the operating expenses, the monthly rent payments will be pretty less. A lower monthly rent seeks to make the property affordable for a large number of business enterprises. Such an agreement works well for properties with many tenants because the operating expenses will divide amongst them, and the property becomes more affordable for everyone.
With property management’s responsibility, the business enterprise will experience the bliss of controlling the asset’s everyday expenses. It means that they can maintain it to suit their individual needs and specifications. This benefit holds the most important for national tenants who place superior value on their brand identity.
The properties with triple net leases find their location near other business enterprises. Doing so will help increase traffic and better exposure from customers who visit other properties/ businesses located in the vicinity.
The Bottom Line
A triple net lease is a real estate lease that works wonders for commercial startup rental properties. It is an agreement wherein the tenant pays one or more additional expenses. It is a good agreement for both the tenant and property owners- for all the right reasons you’ve just read. Opt for a triple net lease agreement and save those rental costs while watching your business escalate to great heights of success.