Demand for this class of real estate is undoubtedly more popular than ever, and there is good reason for that. Primarily, the maintenance costs and taxes are shifted over to the tenant making it a management free property, and these properties tend to hold their value over time.
At Calkain, we are experts in net lease real estate, with a specific focus on single-tenant net lease (STNL). We pride ourselves on being the Triple Net Guys (and Gals) and we are passionate about what we do. Our reputation has been built on our commitment to finding the best solutions for our investors. It’s about maximizing value and building wealth, not just for our own families, but for our clients as well.
We provide a depth of services to not only help investors buy and sell their net lease assets, but also aid them in developing and implementing strategies that maximize the value of their STNL investments.
So why are STNL properties so popular with investors? For one, it is hassle free, and with just one tenant, it’s one rent check to deposit each month. Calculating the expected return is easy, and it’s a great way to build wealth through tax deferments (using a 1031 exchange to obtain larger investment without paying capital gains, yet increasing the revenue stream).
However, STNL investments do have some risk, and is why you should work with an experienced brokerage firm like Calkain to manage your way through and avoid as much risk as possible. Understanding the nuances of the lease structure and identifying the clauses that put burden or expense back on the landlord are a key element in making the right decisions. A savvy investor also knows to check out the credit worthiness of the tenant, after all, with an STNL asset, all your eggs are in one basket. You’ll want to make sure you have a stable tenant that has a long-term interest in staying in the property, and should they vacate, your broker can identify if it’s a property that can easily be re-leased.
Another area in which an experienced broker can assist you, is in understanding how interest rates will impact the value of your property. Knowing the economy and how it’s trending, your broker should alert you to changes. As interest rates go up, the value of STNL goes down – and vice versa. It’s a fundamental rule of finance, and well known to savvy investors. The fixed rent structures lend themselves to being susceptible to interest rate risk, but can be offset somewhat with leases that provide for regular rent increases. Calkain can work with you to set strategy for the best times to buy and sell to maximize the value of your STNL investments. STNL properties make excellent long-term investments, just make sure to do your homework and make smart decisions. And if you don’t like doing homework like the many, Calkain is the perfect match to research for you. We love it, along with STNL!