Three-Property Rule

The three-property rule allows investors to identify up to three potential replacement properties for the property being sold, regardless of their market value. Only one of the three replacements must be purchased.

Triple Net (NNN) Lease

Triple net leased property does not include any ‘extras’ in the monthly rent. A NNN lease is oftentimes used for free standing property that is occupied by a single tenant, such as a bank building, fast food outlet, or a convenience store.

The Three Ns

The letter ‘N’ means “net of” or excluding. The fixed monthly rent a tenant pays is net of the three major operating expenses of a commercial building:

  1. Property taxes
  2. Insurance on the building to cover damage or vandalism
  3. Maintenance on the building, both interior and exterior, such as roof repairs, electrical and plumbing upkeep, and landscaping

Learn more about Triple Net Leases

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