Question by dvrki: When and why would a triple Net (NNN) lease be considered a good option for a tenant?
Particularly in a residential lease. Is this ever a good option? If so, why?
Best answer:
Answer by Steve
A NNN lease for a house allows the Landlord to have a specific known amount coming in every month. Let’s look at the different components of the NNN. Insurance. No difference to you or landlord. If it is a gross lease, insurance cost would just be included in your total amount. Taxes, the same as insurance. If you are signing a residential lease for more than one year, then the incentive to keep the taxes low falls a little more to the tenant than Landlord, but not much. When you move out, the Landlord pays the taxes, and he wants the amount as low as possible. Thirdly, and most broad is, maintenance. Mowing the lawn, your expense. But, here is what you need to know. Who pays for the repairs to the property. Ask the Landlord specifically about this. If the Tenant is responsible, I would consider passing on the deal if it is an older home. AC units have a way of costing a lot of money. Sometimes, there can be a compromise on large items, say anything over $ 500.00 is the Landlord’s expense. If you have any questions, feel free to email.
What do you think? Answer below!