Net-Leased Properties
Definition:
this is any property in which the tenant agrees to pay certain expenses such as insurance, maintenance, and property taxes on top of rent.
Examples:
single net lease, double net lease, triple net lease, bondable net lease.
The majority of Net Leased properties are thought of as equity investments as opposed to cash flow investments. In other words an investor will finance the majority of the purchase price on the commercial property and finish paying off the minority of the purchase price with the rental money collected from the business leasing the property.
Although in most cases the investor sees immediate cash flow each month in the profit arising from the cost of the mortgage and what is being charged to the renter, the major payoff comes from the equity that is put into the property over a period of multiple years.