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What Are The Advantages & Disadvantages Of Triple Net Lease?


A triple net lease is a type of commercial leasing agreement on the property in which the lessee has agreed to pays taxes, insurance, and maintenance in addition to the rent. The lessee has to pay the net amount of  three types of costs ‘Net Real Estates Taxes’, ‘Net Building Insurance’ and ‘Net Common Area Maintenance’ which how this term got its name. This type of lease can also be referred to as a “net-net-net lease(NNN)” or a “hell or high water lease”.



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In such cases, the lessee is responsible for all the expenses or cost that may be hidden or visible. In short, lessee is accountable for all the ownership expenses, leaving the owner free from such hassles. The length of a triple net lease can vary, but many leases last for at least 50 years that include rent, that always increases. here are advantages and disadvantages to a triple net lease for both parties. Individuals considering a triple net lease should research carefully before making a decision.

Advantages/Benefits of Triple Net Lease

  • Properties that are net leased alleviate the owner from the everyday management hassles.
  • The owner gets a steady income paid by investment grade tenant.
  • Tenants has to pay low rent charges, in NNN lease the rent is lower then other types of lease.

Disadvantages Of Triple Net Lease

  • Risky for landlord, tenant may not be able to pay fees or may deliberately damage the building to claim insurance.

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