In commercial real estate, a net lease is a lease in which the tenant is required to pay a portion, or all, of the taxes, fees and maintenance costs for a property.
Single Net Lease – requires tenants to pay property taxes in addition to rent
Double Net Lease – requires tenants to pay property taxes and property insurance in addition to rent.
Triple Net Lease (NNN) – requires tenants to pay the property expenses such as real estate taxes, building insurance, and maintenance in addition to rent and utilities.
Benefits of a NNN Triple Net Lease:
- Triple net leases tend to have a lower rent charge because the tenant assumes more of the ongoing expenses for the property.
- Triple net leased properties have become popular investment vehicles for investors seeking steady income with relatively low risk.
- The benefits for investors include long-term, stable income with the possibility of capital appreciation of the underlying property.