Net lease properties frequently involve long term leases (typically 15 to 25 years with 5 year options after that) with a defined rental rate and increases (called "bumps"). A NNN investment can provide steady income regardless of the condition of the economy or local real estate market. The three major keys to successful net lease investments are good demographics, long term leases and a creditworthy tenant.
Lease terms should be carefully considered. Look at: length of lease, options, kinds and frequency of bumps or increases, termination clauses and any expenses that the investor/property owner could ultimately be liable for. If the investor is liable for some expense (a NN property) it is important to understand if these expenses are capped or not. If not careful the investor could end up with a fixed income with increasing expenses, a poor formula for long term success.
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