Real estate continues to be a tried and tested path to building wealth. Understanding real estate law strategies will certainly benefit any real estate investor. Real estate law includes contracts such as the Triple Net Lease, which offers entrepreneurs a business model to success.
Investors look across the globe for real estate investing. Many of these destinations are in some of the most populated cities including:
• Shanghai, China;
• New York City, NY, USA;
• Lagos, Nigeria;
• Tokyo, Japan; and
• London, United Kingdom, etc.
Two common real estate legal strategies involve creating a company and buying real estate to either diversify income or to rent out to tenants. Real estate investors seeking rental income can take advantage of a legal contract called a Triple Net Lease. The Triple Net Lease, while not as popular as it once was, continues to offer tremendous benefits for both real estate investors and tenants.
Lower Rent than the Going Rate in the Area
In essence, the Triple Net Lease allows a tenant to have a lower monthly rent than the going rate in the area. In exchange for the lower rent, the tenant is responsible for paying the expenses of the property such as real estate taxes, insurance, and maintenance.
For example, if the neighborhood market rent is $2,000. Instead of paying the $2,000, a person on a triple net lease would pay a lesser rate such as $1,500. Over a year, this would save the tenant $6,000. In exchange for the monthly savings, the tenant would be responsible for the property taxes, insurance, and maintenance.
Benefits to Both Parties
Both parties win because the tenant gets a lower rent and the owner doesn’t have the headaches of renting property with the triple net lease. The negative is the owner is not maximizing profits and the tenant fixes and upkeeps the property. Triple Net Leases works equally well in smaller cities with good schools or neighborhoods in high demand. Investors easing into retirement can enjoy a peaceful life while maintaining rental income.
The Triple Net Lease offers many benefits to investors willing to pursue this strategy.
