More and more investors are looking for NNN leases for sale to add to their portfolios due to the nifty benefits these properties bring. In essence, these properties present a relatively low-risk investment opportunity that comes with less responsibility on the landlord’s part, while providing a steady stream of income and consistent returns.
So, if you are also an investor who wants to diversify your portfolio and generate earnings with less stress, then you might want to jump on the bandwagon and invest in these types of properties.
What Are NNN Properties
The concept originated from the form of lease used by the parties involved in the use of the property. Specifically, it is called the triple net lease (NNN), where the tenant or lessee is responsible for handling the operating expenses on top of the base rent, instead of the landlord or owner.
NNN leases for sale are a great option for investors who are looking for a conservative, low-touch, and long-term investment. You can use them as a strategy to move away from other investment properties that require more time and effort to manage.
However, it is important to remember that not all NNN properties offer the same level of profitability.
The Best NNN Properties to Look for in 2021
Among the many NNN properties, there are businesses that are considered “recession-proof”, and these are also the best options to take. Generally speaking, the best tenants for these properties are:
- Convenience stores
- Gas stations
- Grocery stores
- Fast-food chains
- Dollar/discount stores
- Automobile parts stores
- Medical facilities
- Medical retail outlets
With these establishments in mind, here are some names that you should consider.
This business is the largest convenience store retailer, not only in the US but around the world. You can find the name almost anywhere along the road—at walk-up stores, corner locations, gas stations, shopping centers, etc.—in prime locations, which suggests how valuable these properties are.
Purchasing 7-Eleven properties comes with a high cap rate and, usually, a 10-to-20-year lease, with up to 10% rent increases every five years, making it a wise investment decision.
McDonald’s and other quick-service restaurants (QSRs) are some of the most prevalent NNN properties for sale in Georgia, California, New York, and other states in the US. With millions of Americans eating at fast-food chains every day, this business is certainly a great avenue to invest in.
Typically, QSRs want total control of the property they are occupying for brand recognition, so they are a perfect NNN opportunity that assures you of long-term contracts and stable monthly income.
This variety store would not top Westwood’s NNN property choices for nothing. As a steadily growing company, it adds around 1,000 properties in strategic locations every year.
Buying a Dollar General triple net lease for sale would cost you between $1,000,000 and $2,000,000. It entails 15 years for each lease contract and a 10% rent increase for every 5 years, making it a great option for first-time investors.
Like 7-Eleven, these pharmacy stores are also found in prime locations with maximum visibility. No wonder they are leading the US market in supplying pharmaceutical supplies, with over 8,000 stores nationwide individually covering up to 15,000 square feet of space.
To compete with other pharmacies, Walgreens pays premium rental rates to secure the best sites with lease terms of around 25 years.
O’Reilly Auto Parts
As one of the most successful car parts dealers in the US, O’Reilly is also known as one of the most reputable tenants of NNN properties. Since the business launched in 1957, it has expanded to open branches in more than 5,000 locations with plans to open more this year.
Though O’Reilly stores are not considered absolute NNN properties, owning one still requires very little active management, making it viable as a good NNN investment opportunity.
This medical facility has served more than 200,000 dialysis patients at more than 2,000 centers in the US. And amid the COVID-19 crisis, the company has seen strong financial and operational results.
From its success, DaVita is still growing and opening new facilities across the country.
Whether you are a new investor or someone who wants to diversify your existing portfolio, these quality tenants should be able to provide you with the stable monthly income and low-touch investment opportunities that you have been looking for.
Buying Your First NNN Property
Even with the available NNN properties providing lucrative opportunities, investing in them can be tricky, especially when you are a new investor. Fortunately, there are steps that you can take to make the process a lot easier and avoid problems along the way.
- Use a broker or an advisor who specializes in such properties.
This could be the wisest decision you can make when looking for an NNN property to invest in. In a way, a broker or an advisor, like NNN Properties Group, knows the market like the back of their hand, so they can definitely point you to the most stable long-term investment opportunities with the best tenants, fewer risks, and more rewards.
- Find a convenient lender.
While you should start searching for NNN investment opportunities in your area, there is a high possibility that you will travel to another place to find better properties. With that said, it is best to find a lender that will be there for you to help sort out the deals.
Having financing ready will make it faster to process agreements when you see a property that fits your requirements.
- Get in touch with a real estate lawyer.
Any flaw or deficiency in your contract and title of ownership could ruin your investment. For that reason, you need a lawyer to ensure that all terms and conditions comply with both parties’ interests and with the applicable laws. Not only that, but a legal consultant can help you avoid potential problems that may arise during the entire process.
When looking for NNN leases for sale, you should do your due diligence in assessing potential properties, doing your market research, and vetting the kind of tenant to determine the profit potential and long-term viability of your investment. But in any case, you can start on the right foot and get a higher chance of success with the properties listed above.
Of course, you should seek the guidance of professionals who specialize in this type of investment to ensure you are always on course with your strategy.
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