What are the best practices for managing and maintaining a triple net lease property?

1 Choose the right tenant

The success of a NNN property depends largely on the quality and reliability of the tenant. You want to find a tenant with a strong credit history, a stable business model, and a long-term commitment to the location. You also want to avoid tenants who might cause environmental or legal issues, or who might damage the property or its reputation. Before signing a lease, do your due diligence on the tenant's financial and operational background, and negotiate the terms and conditions carefully.

2 Monitor the property condition

Even though the tenant is responsible for the maintenance and repairs of the property, you still need to keep an eye on its condition and functionality. You don't want to be surprised by a major problem or a violation that could affect your ownership rights or value. You should conduct regular inspections, either by yourself or by a third-party service, to check the structural integrity, safety, and compliance of the property. You should also communicate with the tenant and review their maintenance records and reports.

3 Review the lease terms

A NNN lease is usually a long-term contract, often lasting 10 to 25 years, with fixed rent increases and renewal options. However, this doesn't mean that you can ignore the lease terms and clauses once they are signed. You should review the lease periodically to make sure that it reflects the current market conditions, the tenant's performance, and your expectations. You should also be aware of any triggers or clauses that could allow the tenant to terminate or renegotiate the lease, such as co-tenancy, casualty, or condemnation.

6 Stay updated on the market trends

The commercial real estate market is constantly evolving and changing, influenced by factors such as supply and demand, consumer preferences, technology, regulations, and competition. You need to stay updated on the market trends and opportunities that could affect your NNN property and its tenant. You should research and analyze the industry, location, and demographics of your property, and compare it with other similar properties in the area. You should also network with other landlords, tenants, and professionals in the field to learn from their experiences and insights.