Any commercial real estate investor will tell you that this is a lucrative venture only if you choose your investments right. A perfect example is NNN investments, and are gaining a lot of fame in the US and other parts of the globe. They are low risk, stable, and offer passive income over a long period. Although you can go for medical, automotive, or restaurants, dollar stores are pretty popular. They have continued to thrive despite the economic situation and have exceeded most NNN investment expectations.
Why invest in NNN dollar store properties?
1. Stable growth
Dollar stores are highly likely to endure tough economic times. They are backed by investment-grade companies, making them low-risk and stable real estate investments. What’s more? They not only thrive in a tough economy but also maintain steady growth during recession. Most investors buy these NNN properties from the SIG commercial real estate company, and you can get many more from https://signnn.com/.
2. Strategic location
Dollar stores are popping up in most parts of the US and are strategically located. Many offer a strong lease guarantee of 15 years with solid demographics and location for more visibility. You’ll normally fine them located near residents who seek their products and will benefit the NNN investor in many ways. These include passive income, reliability, and recession-proof tenancy.
3. Longer lease periods
The standard lease period for dollar stores is 15 years. With a strong single tenant, you enjoy reliable payments without worrying about bankruptcy. This is because dollar stores have stood the test of time and thrive under the most challenging economic situations.
Although the rental rate may be lower than in a single net lease, it’s the responsibility of the tenant to pay all the property’s taxes, building insurance, cost of maintenance, and repairs over the lease period.
Understanding the NNN lease agreement in dollar stores
Lease agreements in NNN properties relieve the landlord of the property’s expenses, and dollar stores are not an exception. There are multiple features of NNN lease agreements, and it’s worth noting that the contacts may differ between properties. Nonetheless, the standard features include;
Rental monthly amount
In NNN leases, the tenant should remit a certain amount of rent to the tenants. The agreement should state the agreed amount agreed upon by both parties.
Tax & Insurance responsibilities
In NNN dollar stores, the property’s tax is the responsibility of the tenant. The agreement lists down all the terms regarding tax responsibilities and any important deadlines attached.
The tenant should also pay the property’s insurance premiums. The contract should specify what is to be done and how. There may be variances from one property to another, and it’s best for both the landlord and the tenant to understand the terms clearly.
Maintenance & Upkeep costs
Property maintenance is a critical aspect of NNN leases. The contract should clearly spell the extent of the responsibility. In some cases, tenants handle minor repairs but significant repairs like roofing fall on the property owner.
Dollar stores are safe investments for both new and seasoned NNN investors. Like other NNN lease properties, you’ll enjoy a steady income and still push most of the property expenses to the tenant. This frees a lot of time that you can use to focus on other investments.