Net Lease Investments Explained

If you have never heard the term "net lease," you are not alone. A net lease is a lease on a property where expenses are "netted" out of the operating costs. This often excludes operating expenses and real estate taxes from the net rent. A net lease often means the landlord or owner has less property management responsibility. Because of this, net leases are considered excellent investment properties. There are also double-net or triple-net leases available. These are often denoted by the abbreviations NN-lease or NNN-lease. These types of net leases increase the tenant's responsibility over the landlord's or owner's responsibility in terms of operating expenses and taxes. A double-net lease usually signifies that the owner is responsible for the structural integrity of the building itself, while a triple-net lease puts this responsibility on the tenant.

Minnesota's Net Lease Market

There are a number of net leases available in Minnesota, with the wide variety of land and an expansive housing market. The net leases with the most risk are land leases because of the unpredictability of nature. Other risky net leases are what are defined as "multi-retail office" - because sales are highly dependent upon location and the overall economy - and "multi-family" properties - because many tenants lease for only one year and the high turn-over rate can lead to potential loss and risk. Properties with a single tenant or "multi-tenant industrial" leases are the least risky. Single tenant leases usually have one long-term tenant, and multi-tenant industrial leases usually have low re-leasing costs which mean fewer expenses.

There are many companies and agents who can help you find net lease properties that would suit your needs. A simple Internet search for "Minnesota Net Lease Properties" should start you on the right track!

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