NNN properties can be an excellent way to build equity, add variety to your portfolio, or include a low-risk revenue stream for consistent returns over an extended period.
These properties are well-known with investors seeking to leave high responsibility, high-touch investments (like apartment complexes), and delve into assets that still generate revenue without all the monetary obligations and time-spending attached to being a landlord.
The NNN commercial property market has been pretty strong in recent years, making it an excellent option for real estate investments.
However, browsing through the NNN listing to locate a 7-eleven real estate or other ideal option for your portfolio and investment plans can be pretty challenging.
In this guide, you'll learn how to identify the best NNN commercial properties for sale.
You'll also learn the primary factors to consider when hunting for the ideal location and what you should know before making that investment.
Understanding the Ideal Kinds of Properties
The best NNN real estate investments for sale are those with the potential to bring consistent revenues (tenant rents) over a long period.
When searching for NNN leased properties for sale, you need to understand the kind of business operating within the community where the property is.
The robustness of the business site at the NNN commercial properties for sale will directly impact your earning potential in the long run, regardless of economic fluctuations.
In other words, you want to search for recession-proof businesses that will consistently do well, even during economic downturns.
A company that individuals can always trust for necessities has tremendous investment potential than other options that won't thrive in tough times.
Here are a few examples of NNN lease properties for sale that are recession-proof:
- Medical clinics
- Convenience stores (such as gas stations)
- Dollar or discount stores
- Fast food
- Drug stores
- Grocery stores
Understand the Current Market for Your Preferred NNN Property
While navigating the listings of NNN commercial properties for sale, you also need to understand the current market and developing trends that may impact the price and value of the property you're interested in buying.
You also need to get insights into the market value of businesses within the community and the type of rates you should expect for a purchase.
Navigating a constantly shifting market can be complex, so you need to work with a professional net lease advisor to ensure you don't miss a massive investment opportunity or overpay for a property due to misinterpretation of the market state.
A net lease advisor offers primary advisory services, which include:
- Recommendations and strategic advice
- Portfolio analysis
- Property evaluations
Apart from helping you navigate the NNN property market, a professional net lease broker may also help negotiate the best property deal — not just the price but also the tenant lease terms to ensure your profitability over a long period.
Consider the Location, Traffic, and Accessibility to the Location
The location is a major factor in the investment property cap rate, profit longevity, and value.
When buying NNN investment properties, location indeed plays a significant role in determining your long-term profit potential and how lucrative your investment will be.
The best NNN commercial properties for sale should be in places with a strong economy and high population growth.
If numerous individuals move to a specific location, properties within the surrounding area will thrive more than locations with slow population growth.
However, this doesn't necessarily imply that suburbs and small towns don't have great NNN lease investment potential.
Sometimes, population explosions in large cities can trickle into the suburbs and surrounding smaller cities, improving their economy and opportunities for NNN investments.
You might also need to consider the physical location of the NNN property in town.
Corner spots in easily accessible high-traffic areas tend to be great NNN investments since patronizers will prefer such a location to other similar services and stores in town.
Properties that are very close to anchor businesses (such as big-brand stores, established restaurants, and services) also tend to thrive due to the traffic and visibility.
Research Tenant and Business History of Success in the Location
NNN commercial property investment is prevalent among investors looking to avoid all the responsibilities and constraints attached to being a landlord.
In an NNN lease deal, the tenant typically covers most of the costs linked to the property, including insurance, property taxes, and upkeep and maintenance costs.
They also pay rent every month for the leased space, giving the investor a consistent revenue source at little cost.
Since the tenant carries out most of the financial responsibilities in an NNN property, you must ensure that person is trustworthy and experienced.
Getting a tenant with an excellent credit profile and longstanding business history will help minimize the investment risk and reduce the risk of vacancies or defaults in the future.
Read Every Fine Print About the Tenant Property Lease Terms/Owner Responsibilities
Each NNN lease will be as unique and specific as the associated commercial property, so it's essential to understand all that's outlined in the property lease.
The deal typically explains all of the owner and tenant responsibilities in detail.
However, you'll need to ensure to read and understand the fine print to know all your financial obligations as the property owner.
All NNN leases are products of negotiations, so there's no particular template for every NNN lease despite the standard terms.
Hence, you must ensure to understand the terms to avoid experiencing costly surprises as the property owner.
For instance, in some NNN property leases, the owner has partial responsibility for specific insurance premiums or policies.
An owner may also be responsible for the maintenance costs of the building structure (such as the foundation or roof).
If there's any certainty in net commercial lease investment, it's the fact that no two NNN property leases are the same.
Ensure to work with an experienced net lease broker, especially when looking to lease a 7-eleven real estate.
They’ll help you understand every term associated with a lease. They can as well help to negotiate favorable terms where necessary.