Did you cash in stocks and bonds or other investments before the market took a tumble and now, you’re sitting on a lot of cash that’s not growing? Maybe you’re looking for an alternative to the stock market? For a relatively low-risk, smart investment that provides reliable monthly income without any involvement from you, consider an absolute NNN (triple net) lease investment.
Triple net properties and the stock market are very different types of investments with their own advantages and disadvantages. However, in a volatile economy, when stock values fluctuate by the minute, as they are now, it pays to have a steady income-producing investment with tax opportunities that you can rely on. NNN lease investments can ease the pain of stock market volatility and help you build wealth, even in a down economy.
A Quick Overview of NNN Lease Investments
NNN lease property ownership provides 10–20 years of passive income without worry. These investments provide a predictable stream of increasing income, with tenants responsible for paying property taxes, insurance, and maintenance costs, and in some cases, all expenses.
Triple net tenants are typically multibillion-dollar brands that are essential in nature and operate with corporate-guaranteed NNN leases, meaning the creditworthy tenant pays the rent every month for the length of the lease no matter what.
In this lower-risk commercial real estate (CRE) class, you’ll find dollar stores, drug stores, quick service (QSR) restaurants, convenience stores, gas stations, medical clinics, auto parts stores, child care centers, car washes, and more.
To gain more in-depth information, be sure to read our blog: What is a NNN Lease Investment?
How do NNNs Provide Consistent Income?
Triple nets are on the lower side of the risk scale when it comes to CRE investing. Unlike stocks and bonds which tend to fluctuate wildly and can result in huge losses at any given moment, you can count on NNNs to provide consistent monthly income without the nerve-racking instability.
As a NNN owner, you collect monthly rent that’s backed by an investment-grade company or a high-credit tenant, and in some cases, fixed rent increases are built into the lease to hedge against inflation. You also benefit from ownership of a tangible asset that can be sold at any time. Even in an economic downturn, many NNN brands open new stores and grow, just as they continue to sell among those who utilize the 1031 exchange and love to build wealth with NNNs.
As an added benefit, when you own an absolute NNN lease investment, there are zero landlord responsibilities or expenses. You simply collect rent. This allows the money that would be spent on landlord costs and upkeep in a gross lease property to keep working for you. When coupled with tax opportunities, an advertised cap rate of 5.00–6.25% could potentially amount to a 7–10% internal rate of return (IRR).
NNN lease properties provide consistent, worry-free income:
- Backed by multibillion-dollar, creditworthy companies
- Long-term leases from 10–20 years plus term extensions, usually in 5-year increments
- In some leases, built-in rent escalations to hedge against inflation
- Leases are typically corporate-guaranteed; the creditworthy tenant pays rent no matter what
- Depending on the lease, very few landlord responsibilities or costs, if any
“Real estate has a reputation for illiquidity, but triple nets generally defy that stereotype because they are valuable, high-credit tenants that guarantee income. The triple net buying process is also pretty straightforward, so transactions typically close much faster than other real estate, providing income that much sooner,” said Chris Schellin, Westwood Net Lease Advisors President.
Owning NNN lease investments across the country is easy and profitable — you simply collect rent, utilize the tax opportunities available to you, and watch your portfolio grow.
Stock Market Investments by Comparison
Stock market investments tend to be volatile during economic, political, and global crises, with the value of many stocks declining as companies struggle to maintain profitability. You have no control over economic perceptions and predictions, world affairs, interest rate changes, changing laws, politics, or the value of your stock investments. This makes the stock market more difficult to rely on for asset and income preservation and there is a significant risk of losing a lifetime of wealth just when you need it most. You will not face this risk with NNN lease investments.
We’re not saying the stock market doesn’t have its benefits, but most of the benefits are usually realized when you have decades to invest, with the hope of a large payout later in life. The stock market is also liquid, though selling at a profit may not always be possible, as we are witnessing in today’s economy.
For a more detailed analysis of stocks versus NNN lease investments, including a rundown of tax benefits, go to our article: Are Triple Net Investments Better Than the Stock Market?
To Wrap it Up — Have Cash? Want to Invest in Your Future? NNN Investments are a Great Low-Risk Choice
Regardless of what stage in life you find yourself — in a thriving career, selling your business, investing an inheritance, retiring or retired, or investing in your future — owning one NNN property or a mix of properties is a wise choice.
Triple net property assets can provide tens of thousands of dollars of responsibility-free monthly income, balance risk and reward, and potentially offer a comparative internal rate of return of 7% to 10% per property. Unlike the stock market, high-quality NNNs are safe, tangible assets that preserve cash flow, build wealth, and yield increasing returns for up to twenty years — all without having to wait it out or stay in the market for 25 years to capitalize on the gains.
Contact Westwood Net Lease Advisors for a No-Obligation Conversation
If you are ready to NNN invest with all-cash, short-term financing, or you’re utilizing a 1031 exchange, be sure to contact Westwood Net Lease Advisors. We specialize in representing triple net lease buyers and facilitate the entire process, from before the property search through closing and thereafter, to ensure you purchase the best investment for your goals. Reach out today — our buyer representation is free and there is no obligation. 314-997-5227