What is a Triple Net Lease? Is it Right for You?

When you enter into a triple net lease, you take on a lot of responsibility that is normally assigned to the property owner. As the renter, you must pay not only the monthly property rent, but three different types of extra expenses as well.

This type of agreement gets its name from the three extra expenses that you have to take on. If you go for this type of agreement, you will have to pay all property taxes for the property, insurance premiums, and cover all maintenance costs.

In a typical gross lease, the property owner would be responsible for all of these expenses while you just paid your rent and took out your own renters insurance policy. If you go for this alternative lease structure, you essentially agree to let the property owner off the hook for these three categories of expenses.

If something goes wrong and repairs or extended maintenance procedures must be taken care of, you will not be able to call the landlord as you would with a standard gross lease. You are now responsible for more than just paying the rent on a regular basis.

If you have entered into a triple net lease, all emergency repairs or additional maintenance costs must be fixed and paid for by you. Therefore, you can expect to pay a lot more for the property on a regular basis if you go with a triple net lease structure. Usually, your rent payments will be lower since you have these other expenses.

If you want more control over the property you rent, this type of rental structure could work for you. If on the other hand, you do not want the extra expense and responsibility, then you should look for a gross lease instead.

You may from time to time come across a property owner who will only operate under the triple net lease agreement. They usually do not want to handle the responsibility of a regular maintenance schedule, and should offer a lower rent price to make up for the extra expenses you will have to pay.