What is the downside of Triple Net (NNN) leases (to the lessor).?

1. Though NNN leased investments are considered to be highly risk-averse investments, especially when leased to a national credit tenant, the Landlord is still exposed to some financial risk.

2. In the fine print of most NNN leases these risks are specified. For instance, who carries the obligation to rebuild after a casualty (natural disasters included) or whether the tenant must continue paying rent should the property be condemned. The "Bondable NNN Lease" is sometimes referred to as a "True Triple Net" or "Absolute Triple Net" lease and is a variation of the NNN lease in which the tenant cannot terminate the lease or seek any rent abatements under any circumstances.

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3. An NNN Lease is a net lease, structured as a turnkey investment property in which the tenant is responsible for paying the three major expenses associated with commercial real estate ownership.[2] "NNN" stands for "Net-Net-Net", is pronounced "Triple Net" and represents the three most common, consequential real estate related expenses:

N - Property Tax

N - Insurance

N - Maintenance

http://en.wikipedia.org/wiki/Triple_Net_Lease

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A NNN employ for a house helps the owner to have a particular time-commemorated volume coming in each and every and each and each month. enable's look on the numerous factors of the NNN. coverage. No distinction to you or landlord. no count if it fairly is a gross employ, coverage fee ought to really be blanketed contained in the total volume. Taxes, the similar as coverage. if you're signing a residential employ for extra proper than one 365 days, then the motivation to maintain the taxes low falls a splash more desirable to the tenant than Landlord, yet now no longer plenty. once you progression out, the owner will pay the taxes, and he needs the quantity as low as obtainable. Thirdly, and optimal wide is, upkeep. Mowing the exterior, your cost. yet, properly that's what you are able to wish to comprehend. Who will pay for the upkeep to the valuables. Ask the owner especially about this. If the Tenant is to blame, i ought to guage passing on the deal no count if it fairly is an older residing house. AC instruments have a way of costing a sturdy type of money. each and every so frequently, there's a compromise on great products, say something over $500.00 is the owner's cost. once you've any questions, be happy to digital mail.