When Should You Accept a Net Lease?

A net lease is a type of lease that is commonly used in commercial property applications. Here are the basics of the net lease and whether you should consider agreeing to one.

Net Lease

The net lease is a type of lease that requires the tenant to pay for additional expenses on top of their rent payment. Most of the time, these additional expenses are things that are paid for by the property owner with a traditional lease agreement. For example, you might have to pay for property taxes, insurance, property repairs, and maintenance expenses.

Considerations

If you are the landlord of this type of property, you can create a completely "hands off" type of real estate investment. You will simply have to collect your check every month and you will not have to worry about anything else. If you are the tenant, this may not always be to your advantage. However, with most of the prime commercial real estate properties out there, you are going to have to consider accepting this type of lease. This type of lease is commonly used in situations where a commercial tenant is going to be in the property for an extended period of time.

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