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Triple-Net Lease: Alternative to Farmland Investment

If these are some of your concerns, consider purchasing triple-net leased properties with long-term corporate leases from national tenants.  A triple-net lease is a lease agreement on property where, in addition to rent, the tenant pays all real estate taxes, building insurance and maintenance.  Because the tenant is responsible for all costs associated with repair and maintenance, you as owner are free of any day-to-day management responsibility.

Many regional and national companies choose to lease their business property. A triple-net lease gives them control over the property without the financial commitment of ownership. This frees up corporate funds for business expansion and improvement. National tenants include such companies as Taco Bell, Dollar Tree, Sherwin Williams, Auto Zone, Verizon Wireless, Walgreens, Sports Authority and Office Depot, to name just a few.

A triple-net investment property offers several advantages:

  • You are free from day-to-day management issues.
  • You receive a steady income stream from a reliable corporate tenant.
  • The long term lease to a tenant with good credit rating insures your comfort level with the investment and if necessary, makes it easier for you to get a mortgage loan at favorable rates.
  • Such a property usually has a high residual value.

How do you convert your land ownership into properties with triple-net leases? There are three steps:

  1. Sell the property you own
  2. Structure a 1031 tax-deferred exchange
  3. Purchase property with a triple-net lease

Reck Agri Realty & Auction can guide you effortlessly through this process. We have both the expertise to market your property and the professional contacts to facilitate the 1031 exchange as well as provide access to triple-net leased properties.

For example, consider a real-life situation of a farm property sold in Pennsylvania.  The property sold for $4,000,000 with annual rental income of $50,000.  The property was sold and exchanged for four triple-net leased properties with national tenants paid monthly with an annual income exceeding $250,000.

Do you want to be free of managing your property while preserving equity and earning a 6-8% return paid monthly? Do you want to transfer your assets to future generations and avoid capital gains? Then call Marc Reck (970) 522-7770 to discuss your situation and let us help you make it happen.