Triple Net Properties: An Ideal Source Of Passive Income

How often have you heard the phrase “Higher the risk, higher the return”? Probably thousands of times, right? But what if we tell you that there is an opportunity for you to earn higher returns with a lower level of risk? 

Seems unbelievable, doesn’t it? 

Well, it is true! You can reap numerous benefits by investing in triple net properties. Don’t know what it is? No worries, scroll down to learn! 

What Are Triple Net Properties? 

Triple net properties (also known as “NNN” properties) are attractive real estate investment options. These provide low risk and a high return to the first-time commercial property buyer. Or those who don’t like to put in a lot of effort while speculating. 

These investments hold the lessee or tenant liable for the payment of expenses that the landlord generally bears. These expenses include property tax, building insurance, and regular repair and maintenance. 

Moreover, the property lease is also long-term. That means you can sit back and enjoy the regular rental income. 

Key Elements of Investment

Basically, there are two key elements of investment, i.e., 

  1. A well-designed lease structure, and
  2. Finding a suitable tenant. 

Generally, those investors who don’t want to get associated with property management yet wish to get regular rental income opt for triple-net opportunities. In addition to this, investors can also safeguard themselves from capital gain taxes under the 1031 tax-deferred exchange. 

There are several other reasons for you to consider this as an ideal option to earn passive income. 

Why Should You Select NNN Properties For Investment? 

  • Consistent Source Of Income

The basic idea behind this investment is that property owners can enjoy a consistent income for a long period. Your only work is to find a suitable tenant and sign the lease agreement. Besides that, you don’t have to worry about repair and maintenance of the property, annual insurance, or any other regular expense. 

  • Build Equity

You might not believe it, but “NNN” properties are often used for portfolio diversification. These are added as conservative, low-risk assets to build more equity. In simple terms, if you put your Triple net property for sale during the market peak, you can get higher returns. Isn’t it a great reason to invest in? 

  • Low-risk Investment

As the tenant will bear all the expenses, you don’t need to worry about the market fluctuations. That means the tenant will manage an increase in taxes or insurance premiums on their own. So, your level of risk is very low. 

  • Fewer Landlord Duties

Unlike the other real estate investments, you don’t have to be worried about the mortgage or upkeep of the building. All these responsibilities are already assigned to the lessee. That means you’ll have more time in hand, to make further investments and elevate the returns. 

How to calculate Triple net lease? 

The monthly rental amount is generally calculated based on the rate per square footage. But sometimes, the landlord adds up the property taxes, maintenance charges, insurance, and common area expenses for the premises and divides it by 12 to get the monthly cost.

To conclude, 

If you are looking for an investment option that is effortless yet provides valuable returns, you should consider triple net properties. These will surely make your portfolio strong and offer you regular passive income. 


Jonathan Rice

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