Triple net lease (NNN) properties are an excellent investment option for property owners, primarily because they offer little or no risk and yield a substantial flow of income. However, it can be challenging for real estate investors to find NNN properties for sale, especially since there’s no specific listing service for NNN buildings.
Regardless, prospective property owners can still find and purchase NNN properties through several other options. Throughout this article, we’ll discuss some of the ways real estate investors can find NNN properties for sale. Before we dive in, though, let’s look at the benefits of an NNN lease property and some things to consider before buying one.
Benefits of Buying an NNN Property
NNN lease properties are popular among real estate investors because of the many benefits attached to them. Briefly, here are some of the advantages of investing in an NNN building:
Consistent Income Stream
Typically, the tenant in an NNN lease property accounts for the operating costs. The landlord doesn’t spend any part of the rent on expenses concerning the property, thus, giving him a consistent stream of income.
Reduced Administrative and Financial Responsibilities
Tenants in an NNN building handle all operating expenses, including taxes and insurance. As a result, the property owner has little or no administrative and financial duties to execute.
Long Term Tenancy
NNN properties typically have a lease term of around 7-10 years. This factor assures the landlord of a stable source of income throughout the tenancy contract. Also, since the lease won’t expire every couple of years, the landlord doesn’t go through the hassle of looking for new tenants now and then.
Things to Consider Before Investing in an NNN Property
While the investment returns of NNN lease properties can make it tempting for investors to rush into the market, there are still several things to consider before buying NNN buildings. Quickly, we’ll discuss some of these elements:
Location
Location is one of the essential elements to consider when investing in real estate. Location plays a crucial role in the valuation of a property and its long-term potential for success. This factor is also incredibly critical if you’re buying a commercial property.
If you’re buying an NNN property for business purposes, the ideal location would be an area with high traffic. Establishing businesses in areas with low traffic generally leads to low patronage. You should also consider areas that are accessible because tenants and customers generally don’t fancy buildings that they’ll struggle to locate.
Demography
Before purchasing an NNN property in any location, you should consider the demography in that area. You probably already know your ideal client, so your goal is to determine if the residents of your preferred vicinity match your profile. You should look out for things like income level, economic growth, and tenant demand. Overall, ensure you pick a location with your ideal residents.
History of Tenants
NNN leases typically require tenants to cover all operating costs of a building alongside the rent. As such, you must have tenants who do not slack in paying the bills. With that in mind, you should carry out due diligence to find out the history of tenants in the location you’re buying the property.
Do they pay rent on time? Or do they have a habit of defaulting on payments? Also, when a tenant shows interest in the property, you should do your research on them to discover their history with rent payments at their previous apartment. While NNN buildings have the potential to generate substantial income, you could fail to reap the benefits of your investment if you lease the building to the wrong tenant.
How to Find the Right NNN Property for Sale
Finding NNN properties for sale – or any real estate asset, for that matter – can be an uphill task if you don’t know where to look. Fortunately, we know just how you can find available NNN properties for sale right now. Here are two sure-fire methods to help you discover NNN buildings up for sale:
Online Listings on Commercial Real Estate Websites
One of the best ways real estate investors can find NNN properties available for sale or lease is through commercial real estate websites that list all commercial real estate asset types. Generally, these websites categorize NNN properties based on location, whether they’re available for sale or lease, and the business industry.
Thus, real estate investors can find a wide range of NNN assets through these platforms. One excellent example of a commercial real estate website with an extensive catalog of NNN lease properties for sale is Loopnet. Loopnet has over 500 listings for property owners to consider. Also, the website allows real estate investors to filter search results based on building type, business industry, price, cap rate, and location.
If you’re looking for NNN properties for sale in California, Starbucks NNN properties for sale, or CVS NNN properties for sale, you can use Loopnet’s search filter to run through the over 500 listings available to find what’s ideal for you.
Hire a Real Estate Broker
Real estate brokers are the traditional way to invest in real estate assets. Generally, brokers have industry insights that could guide your investment decisions and ensure you don’t make the wrong move. They also have information on a wide range of properties in different locations. This factor gives you an edge in your search, as you’re more likely to find a property that suits you.
Furthermore, you’re less likely to overpay for a building since commercial real estate brokers are well-versed in commercial property valuation. And finally, realtors have the necessary negotiation skills that could help you seal the deal effortlessly. Overall, having a real estate agent by your side could be your best bet for investing in an NNN property.
Final Thoughts
Investing in real estate is a lucrative venture, even more so when you purchase an NNN property. NNN buildings come with minimal risks and a stable income flow. But with all the benefits attached to this asset class, investing in the wrong building could be devastating for you.
As such, you need to take the proper steps to help you find the ideal property. Rather than carry out a random search, we recommend you leverage commercial real estate websites to discover NNN listings or work with a real estate broker.
