5 Lease Types
1. Fixed lease
- Pay monthly rent, some utilities, and nothing else.
- Landlord pays taxes, insurance, maintenance, and sometimes utilities.
2. Net lease
- Monthly rent + percentage of other expenses (tax, insurance and maintenance).
- The portion of other expenses is based off the size of the space rented.
- cost increases over time.
- 3 main forms
- Single net lease - N lease, tenant responsible for one extra expense.
- Double net lease - NN lease, tenant responsible for two extra expenses.
- Triple net lease - NNN lease, Tenant is responsible for three major expenses.
3. Percentage leases
- Tenant pays base rent + percentage of gross income (when exceeding a threshold).
- Some percentage leases will not have a base rent and simply be composed of a % of income.
- This can be a great option for those who have peaks in business and then slow periods.
4. Modified gross lease
- Customisable leases that fit both the landlord and tenant.
- When signing onto a modified gross lease take extra caution.
5. Absolute NNN lease
- The tenant is responsible for all costs.
- Tenants pay fixed rent, the share of property taxes, maintenance, and insurance.
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