Triple Net Lease (NNN)

A triple net or NNN lease is a single-tenant arrangement that requires a tenant to pay necessary property expenses instead of the investor or property owner.
NNN Lease


Unlike a standard or gross lease where the tenant is only required to pay property rent which is then used by the investor to pay property expenses, a NNN lease requires the tenant to pay all major property expenses along with the base rent. In other words, a NNN investor doesn’t need to spend a single penny on the maintenance of their property.

You may encounter variation in NNN leases...

Before we explore the variation in NNN leases, it’s important to know which property expenses are covered in a NNN lease. Generally, in a NNN lease, the tenant is required to pay all three major property expenses–insurance fee, property taxes, and maintenance cost. An absolute NNN lease or just NNN lease requires the tenant to pay all these three property expenses along with the base rent.
On the other hand, a double net or NN lease requires the tenant to pay just two property expenses along with the base rent. Though the two property expenses could be any, they mostly include insurance fee and property taxes. Whereas, the investor or property owner is still responsible for paying the maintenance cost of the property.
Similarly, a single net lease requires the tenant to pay one property expense along with the base rent. The tenant will either pay the insurance fee or property taxes, whereas, the investor or property owner needs to cover the other two expenses.
Note: As the tenant is also responsible for paying the property expenses, the base rent in a NNN lease is slightly less than that in a standard or gross lease.
Benefits of

NNN lease investment

No property expense

No matter how many times we mention, no property expenditure is what NNN investors enjoy. As the tenant is responsible for paying major property expenses, NNN investors enjoy a regular flow of income without any liability.

Regular flow of income

As the majority of NNN tenants are big established companies, the risk of default is quite insignificant in NNN investment and NNN investors enjoy a regular flow of income for a long time.

Tax advantages

NNN investment is a way using which investors can complete their 1031 exchange and defer up to 100% capital gains tax. Accredited investors can exchange any investment property for NNN property or vice-versa using a 1031exchange and defer capital gains tax.

Who is it for?

Any accredited investor with a net worth of at least $1 million, excluding the value of their primary residence or $200K of income, can invest in NNN properties. Small investors may own NNN properties by investing in Real Estate Investment Trusts (REITs) that have such properties in their portfolios. Unfortunately, non-accredited investors can’t take part in NNN lease investment.

How we can help?

If you’ve just started your investment journey, you certainly need the assistance of an experienced advisor. Having a qualified advisor or expert by your side can help in overcoming all the investment-related challenges. They can also clear all your doubts. We, at, can match you with up to three highly qualified advisors within no time. In addition, we also make sure that one of our advisors stays with every investor throughout the transaction.

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Perch Financial LLC and Arkadios Capital LLC do not provide legal or tax advice. Securities offered through Arkadios Capital LLC Member FINRA/SIPC and MSRB registered. Arkadios Capital LLC is unaffiliated with any entity herein.

1031 Risk Disclosure:

  • There is no guarantee that any strategy will be successful or achieve investment objectives;
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  • Change of tax status – The income stream and depreciation schedule for any investment property may affect the property owner’s income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities;
  • Potential for foreclosure – All financed real estate investments have potential for foreclosure; ·Illiquidity – Because 1031 exchanges are commonly offered through private placement offerings and are illiquid securities. There is no secondary market for these investments;
  • Reduction or Elimination of Monthly Cash Flow Distributions – Like any investment in real estate, if a property unexpectedly loses tenants or sustains substantial damage, there is potential for suspension of cash flow distributions;
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