Triple net lease for residential property? - Posted by Ben (NJ)

Posted by Frank Chin on March 04, 2002 at 06:44:04:

Hi Ben:

I know LONG TERM NNN been done in NYC for the expensive brownstones.

But in the case of foreclosed SFH homes like yours, you simply stipulate in the lease that the tenant handle small repairs. If its a MF, simply reduce the rent of one of the tenants to act as the super.

I have a SFH where the tenant hadn’t called me in the whole 12 years he’s been there.

I also have tenants pay Roto Rooter and mail me the bill. As for lightbulbs, I guess you mean for the common areas of MF’s. There I use the ones they sell that last for 10,000 hours. They burn out every three to five years.

In a NNN lease, the tenants pay the RE taxes as well. I’m not sure that’s what you’re looking to do. To make sure things are done, right, you’ll have to pay the bills yourself, and in turn bill the tenant anyway.

Depending on the area, I hire a lawn service. I find tenants to be undependable in this regard, and gives rise to compliants from neighbors. As absentee landlords, the last thing you want is for neighbors calling the town on you, which they will if the grounds are not maintained. Also, I find this service useful to make the place look occupied between tenancies, especially around summertime.

Frank Chin

Triple net lease for residential property? - Posted by Ben (NJ)

Posted by Ben (NJ) on March 04, 2002 at 03:28:51:

I am close to taking title to a few houses through tax foreclosure. I want to hold onto them for at least a year, mostly to avoid paying huge capital gains. I will rent them out but don’t want to be plunging toilets and changing lightbulbs. Is there a residential equivalent to the triple net lease?

Re: Triple net lease for residential property? - Posted by Janice

Posted by Janice on March 04, 2002 at 13:35:58:

You mighht want to consider rent to own, or lease options. That way you might find tenants who will have a stake in the property, and therefore take better care of it. At least that’s the theory.

Triple net lease for residential property? - Posted by ken in sc

Posted by ken in sc on March 04, 2002 at 06:58:01:

A couple of thoughts. First, most tenants will not fix things, they will just let them go. They do not own the house. Obviously, you want those repairs that are needed handled well to protect your value. For example, a simple $100 plumbing repair can save a $2000 bath floor replacement that would be needed if the repair is not made. Thus, I do not recommend NNN leases. It will just mean a run-down property. Even if you offer a lessor rent. Instead, I would hire a property management company if you can find a good one, or manage it yourself. It is really not that much work for a couple houses. I have not gone to a house in the middle oif the night or plunged a toilet in 10 years. And I have more than just a couple. So either learn how to do the managing, hire it out, or except the fact that your house will look worse and have higher repair costs when you get ready to sell.