I do not have time or expertise; can I invest in Commercial Real Estate?
People often ask this question, I do not have time and I do not want to deal with tenants, can I still invest in Commercial Real Estate?
My answer to this question is, “Absolutely”!
STNL or ‘Single Tenant Net Lease’ properties are the type of properties that busy professionals or the people who do not want to deal with day to day tenant responsibilities can invest in.
STNL properties are usually free-standing building leased to some of the popular tenants like, Starbucks, Dunkin’ Donuts, Taco Bell, CVS Pharmacies, and many more credited tenants. STNL leases are usually NNN (triple-net) leases, some are NN (Double Net) leases. The more NNN’s in the lease, the less the responsibility for the property owner.
STNL properties are very attractive to many investors because of many benefits they offer, for example,
- Stable and Predictable cash flow every month
- Net lease investments are usually guaranteed by corporate or by the person
- Good choice for busy professionals or investors who do not want to deal with tenants
- First time Commercial Real Estate Investors
- Very minimal to no management responsibilities
- Long term leases in place, no need to look for tenant every year
- Most of the expenses, repairs, upgrades are handled by tenants rather than landlord
Single-tenant net-lease properties may provide higher degree of security as these properties are rented by publicly traded and/or investment-grade companies like Starbucks, Walmart CVS, FedEx etc. Also, it’s easy for investors to research credit rating and financials as this information is available to general public to research and make educated decision about their investment property.
Conclusion, STNL investment category may not fit everyone, but have several benefits. Adding few of these to your portfolio gives consistent flow of income with minimal landlord responsibilities.
