The real estate platform has developed a proprietary software that makes it easier for investors to search for high-quality net lease investment properties nationwide, and also instantly make offers via a digital letter of intent
Fort Lauderdale, FL, April 23rd, 2022, ZEXPRWIRE, Net Lease World is being touted by real estate property investors as the most user-friendly commercial real estate platform on the market. The US-based real estate company has developed a proprietary software that allows users to easily search for high-quality nnn properties for sale all over the country.
In commercial real estate, a net lease refers to a system that requires the tenant to pay for some, or all of the property expenses, that normally would be paid by the property owner, in addition to the base rent of the property.
The expenses, which often include property taxes, insurance, maintenance, repair, operations, and utilities, are categorized into “three nets” – property taxes, insurance, and maintenance. Due to the extra responsibility placed on the tenants, the base rent is usually lesser than what it would naturally be.
Ideally, net leases are categorized into 5 types that cover all types of properties ranging from residential to office and industrial properties. The first type is the Single Net lease in which tenants are required to pay the base rent and also handle the property taxes on behalf of the property owner.
In the Double Net or NN lease, the tenant pays the base rent, handles the property tax, and also pays the insurance premium on the property. The third and perhaps most popular type of net lease is the Triple Net or NNN lease which requires the tenant to pay the base rent, property tax, insurance premium, and also handle all maintenance and repair costs during their stay.
Also known as the “absolute triple net lease” or “true triple net lease,” a Bondable Lease is the fourth type of net lease and is considered the most extreme variation of a triple net lease. Under a Bondable Lease, the tenant bears every possible risk associated with the property and is also responsible for rebuilding in the event of structural disasters, regardless of the adequacy of insurance proceeds.
The fifth type of net lease is a Ground Lease under which landowners give out their lands to tenants who will agree to build and continue to pay rent and handle all other expenses for a specified time, after which ownership of both the land and the property will revert to the landowner.
Generally, net lease properties are popular among four groups of real estate investors. The first group, which are Institutional Investors, consists of Real Estate Investment Trusts (REITs) and Private Equity firms that allocate a portion of their capital to net leased properties.
Merchant Builders – either as individuals or firms, that have pre-existing relationships with prospective tenants can also agree to select a site, construct a building, and execute a long-term lease. The third group of real estate investors particularly positioned to profit from net lease arrangements, are business owners who execute a leaseback transaction, where they sell the property to an investor to raise capital and simultaneously lease it back from them.
At number four are 1031 Exchange Buyers. This group of property owners defer the tax bill on significant capital gains on their properties indefinitely, by selling the said properties and investing the proceeds into another property of the same value. Due to their relative stability, low management responsibilities, and long-term leases, net lease properties stand out as excellent replacement options.
As regards investment strategies when navigating the net lease real estate, Net Lease World posits that net lease agreements can ideally be grouped into two types.
The first type, known as the Core group, is relatively low-risk with long-term leases, reliable tenants, consistent cash flows, and periodic rent escalations. While the second is usually high risk and involves sellers looking to divest their properties because of failing tenants.
According to Net Lease World, a triple net lease for sale presents the best opportunity for low-risk wealth preservation. The company describes them as a safe and reliable investment option that minimizes risks and ensures a guaranteed recurring income.
“Triple net lease properties are becoming one of the most popular investments in recent years. It’s a very low-risk option for investors because they’re guaranteed to get income without worrying about other expenses. By transferring maintenance costs, property taxes, and insurance premiums to the tenants, property owners can save themselves from many expenses and generally drive the operating costs of their properties to the nearest minimum.”
Net Lease World insists that triple net lease properties provide more consistent cash flows when compared with other unstable options such as stocks and bonds.
Through the use of its proprietary software, Net Lease World makes it easier for investors to find and bid on triple net properties for sale all over the country. Users can search for properties through a wide range of filters that include searching by sector, tenant name, location, price, cap rate, income, or least term.
In addition to allowing investors to compare multiple tenants side by side, the platform also lets registered users maintain a favorite list where they can save properties they find when scouting for easy reference later. Investors who find properties that pique their interests, and desire to learn more about them, can simply click on the more information button to send an automatic email request.
To make closing deals as easy and seamless as possible, the platform also houses a “make an offer” button on each listed property which will pop up a digital letter of intent on which users can electronically sign from the convenience of their smart devices.
For investors looking to add net lease properties to their portfolios, Net Lease World has suggested a few cautionary tips that would help them to discern risky deals from reliable ones.
“While net lease properties present a wonderful option for investors to enjoy stable cash flows as well as a relatively passive involvement in the day-to-day management of the properties; the stringent conditions and rigid timeline dictate that buyers spend time evaluating every aspect of the deal, to ensure it is compatible with their risk tolerance and time horizon.”
According to Net Lease World, every investor must make sure to tick all the boxes in the following net lease evaluation checklist;
- Tenant evaluation including the verification of things such as good credits and a strong balance sheet.
- Evaluation of the real estate fundamentals such as the kind of market the property is in and if there is good visibility, etc.
- Concrete analysis of the lease term.
- Search for periodic rent escalations clauses in the contract.
- The possibility of a replacement tenant to pay the current rent or afford an increase.
- Evaluate stability of property cash flow against other income-generating assets.
Anyone interested in adding net lease properties to their investment portfolios can simply visit the company’s website, or reach out to Net Lease World via the contact info below.
Company: Net Lease World