What to Look For In a Triple Net Property Investment
When you are thinking on the way to invest in property, triple net property investment can be one of the most reliable forms of real estate income producing investment. All what to know is that, you will be entering into a long term investment, and you need to have the best location, the right tenant, asset, lease and ownership. When it comes to location, you need to think about replace ability and the tenant demand. When your property is in a stronger location, you are sure it will cost more.
You need to ensure that the property is in the right condition and fetching the right amount. The cost and the condition depend on each other. You will be able to replace tenants easily when you have the right asset. When you have an asset that is custom-made for a particular client, you may have issued when it comes to changing the tenants.
You also need to think about the tenant for your property. In this volatile economy, you should think about having the right tenant You have to choose a tenant with the best credit rating. When you are looking for the right tenant, you need to make a difference between corporate backed and franchise backed leases. The strength of a certain brand may indicate how strong the company is but it may not be an indication of the strength of the leas especially if it is not backed by the parent corporation. It is also wise to think of tenants who are protected or benefiting from the amore volatile economy.
You also need to know all about the lease information before selecting the right lease. All that information can be available on the internet. The best lease should be long term for stability and provision for lease bumps that take acre of increases in rent. It should be free from any early terminations.
The other important thing that you should consider is the ownership structure. You need to learn and be familiar with different real estate ownership types. The recommendations are upon two types. You can choose between a fee simple ownership and a fee ownership lease. You would rather have either the ownership of both the property and the land or at least the land other than a property on a and that is on lease. You need to be sure about the ownership of the property that you are investing on. If you release that the ownership is not clear, you should not put your money on that property. Real estate is a big investment and you need to be sure that you have done your homework well before you put your money there.