Property What to Consider Before Purchasing
There are some terms worth noting in this article at the very start. They are nnn leasing, nnn properties, nnn properties for sale, triple net investment, triple net lease, triple net lease depreciation, triple net leasing, triple net properties, triple net properties for sale, triple net property, triple net property investment, and more.
The key with all these terms is something called the Triple Net. There is a statistics and other statistics that explain what this concept is, and generally it applies to properties. The statistics are:
- A triple net lease is a lease agreement on a property where the lessee agrees to pay real estate taxes, building insurance, and maintenance.
- Investors in triple net lease investment offerings must be accredited, with a net worth of at least $1 million.
- Investment in U.S. commercial real estate surged 85% in 2015.
A triple net agreement may seem out of the reach of ordinary Americans, as is applies not just to real estate taxes but to building maintenance and building insurance. This is a considerable amount of income and generally their income has to be at least $1 million, which is a high amount to pay.
However, it is possible to become involved in real estate investing even without the NNN designation or millions of dollars in the bank account. A person can be able to invest in real estate with just tens of thousands of dollars and sometimes less if they are planning to purchase a property along with other investors.
The idea behind real estate investing, which most Americans believe is a good investment, is that a property will be purchased for a certain amount and then resold after alterations done to the property or nothing at all for a price that is more than the original price it was purchased for.
A person will have to take many things into consideration. The first is the property value, which is how much a property is worth, taking into account the price of the property, the buildings, if any, on the property and the value of those things on the property as well. There can be many things on the property that have value, aside from buildings.
There is the case of farmland, where a property will have crops growing on top of it. In this case, the soil, the nutrients in the soil, and how much can be planted on the soil all factor into how much the property is valued for. A property has value more than the price and how much it will appreciate over time.
A property also has value because individuals might want to purchase that property later on. A property that is in a prime location, where there is or will be heavy demand for the property makes the the property more valuable.
A person who is investing in a property has to take their current income level and the amount of savings they have before purchasing the property. Generally, properties can be purchased either outright or through a leasing agreement with a bank. The bank decides the terms of the loan, including the interest rate on the loan after the monthly payments.
A person will have to show that they are making a high amount of dollars or enough dollars to warrant the issuing of the loan. It is similar to a car loan or a house loan. A person will need to show they make enough money to cover the loan, even with the interest rate.
A person will need to have a certain amount of savings to be able to purchase a property, as there is likely to be a down payment needed to purchase the property, the down payment being a certain amount of money that is placed or paid to the bank before the terms of the loan begin. The down payment is generally going to be thousands of dollars.
Commercial rent is an important factor to consider when purchasing a commercial property. Commercial rent can include the amount of money that needs to be paid every month, similar to a loan payment, and commercial rent can also mean the amount of rent needed to pay by tenants for the use of the commercial building.
Commercial rent will determine how much money the person will pay.