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Triple Net Leases Allow Tenants More Freedom and Owners More Profit

Jan 9, 2008
Triple net leases are becoming more popular in the Houston area. Here, they are obviously less expensive for the property owner, and can allow a truly passive form of income for the property owner. With one of Houston's triple net leases, a property owner can be hands off, which is exactly what more and more property owners are looking for. Of course, there are down sides to them as well.

Most triple net leases give control of the property to the lessee, which can be either a good deal or a bad deal, depending on who the property owner is dealing with. They provision the renter to pay for maintenance as well as other costs associated to property ownership.

Before ever purchasing one, potential owners should have these leases looked over by a Houston real estate attorney to be assured that the property owner can still control structural changes to the property as well as enforce the general maintenance that the property requires.

While a property owner can simply go online and download a lease agreement, these leases in particular can work against the owner of the property. Legally speaking, it is very difficult for a property owner to deny liability for destruction of property, especially if they are being held accountable by a third party. A well written, clear and concise lease can help avert such situations.

Every triple net lease property for sale in Houston is going to vary at least in structural repair requirements. Many of them require the tenant to pay for everything except roof repairs while some require everything including roof repairs. A bond clause requires the tenant to pay for the property even if the property doesn't exist anymore, such as the loss resulting from fire, flood, earthquake, or other natural disasters.

Triple net leases are a hard sell for potential tenants, regardless of whether you are referring to residential tenants or commercial tenants, and there has to be a motivation for the tenant. There is an exceptional amount of negotiation associated with them, and potential purchasers should yield to caution when entering a pre-existing lease.

Leases for sale with huge profit potential can be difficult to find. They take a bit of cultivation, and a bit of finessing to create the perfect situation. If the tenant of a triple net lease is not worthy of the sale, the sale will often never materialize.

Both the landlord and the tenant can benefit from a triple net lease and can experience great frustration from them too. Keeping in mind that the tenant who agrees to one needs to get something out of it, purchase of a triple net lease in Houston can lead to more pitfalls than necessary if the situation hasn't been scrutinized.

In most cases, residential leases in Texas are rare. It costs too much money. The only notable exception to that rule refers to some apartment buildings, usually units that house between 6 and 12 units. These can be an acceptable alternative to home ownership under the right circumstances. The vast majority of triple net properties in the area are commercial properties.

Finding an ideal triple net lease for sale in Houston or the surrounding area can be considered an impossible task. Because they are unique between landlord and tenant, most ideal situations are created rather than purchased. Those leases which are up for sale are often good situations, but a potential owner is hard pressed to find a perfectly ideal situation unless they have created it for themselves.

Creating one and then selling it can be ideal for those looking for a high end real estate business. Some of these leases are signed for as long as 50 years, offering up some very tempting terms for a potential buyer. After all, provided that the lease is signed for an extended period of time, the lease can provide a significant income-expense ratio for the owner. Additionally, the resale of one can also bring in revenue.

Anyone considering purchasing a triple net lease for sale in Houston should never consider the purchase without the assistance of an attorney for the simple reason that these leases are personalized per situation.

A great find will still be a great find after a lawyer looks over the lease. A good find can turn into a great find after an attorney evaluates the lease. Then of course, a lawyer can save you much headache and pain when it comes to a triple net lease that shouldn't be touched with a single dollar.
About the Author
The Johnson Development Corp. is a Houston-based residential and commercial land development company that has over 40 years of experience in the real estate development business. For more information visit http://www.johnsondevelopment.com
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