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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