Read the lease. I will often see a flyer or offering memorandum stating the investment is “Triple-Net” (NNN), which means the tenant(s) pay all costs of being there – property taxes, insurance, maintenance, utilities, etc. The owner receives one monthly check, known as “mailbox money,” a great setup for absentee or hands-off investors.
Where the disconnect happens is with the actual tenant lease(s), which sometimes clearly state certain expenses are passed to the landlord, or have caps on tenant exposure.
The devil’s in the details. Before you calculate your returns, or make that initial offer, take time to review the lease!
– Steve Massell, Massell Commercial Real Estate
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