Should you Finance an NNN Property Purchase?
Triple net properties, or NNNs, are considered an ideal investment for anyone looking for a stable source of passive income. But what if you finally find those perfect NNN properties for sale and you haven’t got the cash to make the purchase? Financing is an option that shouldn’t be overlooked. In fact, financing a triple net property may be smarter than paying cash.
Reasons to Finance NNN Properties for Sale
Taking on a loan for any reason is a big decision. But for that matter, investing in any real estate is also a big decision. If you are in the position to purchase a commercial property then you understand and accept that no investment is 100 percent risk-free.
A smart investor calculates their potential risk and rewards to make a sound decision. Once you consider all the benefits of financing an NNN, you can make a more informed decision. And ultimately, you are the only one who can decide how much risk you’re willing to take.
If you choose to finance your NNN property, a 30-year fixed-rate loan offers some great advantages. First, your payment amount will never change, giving you a more predictable outflow month to month. And perhaps most importantly, a 30-year loan offers the lowest possible payment, giving you a more favorable cash flow.
Emptying out your savings account to purchase NNN properties for sale is a big risk. In fact, one of the biggest mistake new investors make is shorting their cash reserves and leaving themselves with nothing to cover unexpected emergencies. Financing your triple net property gives you more flexibility and leaves money in the bank for other opportunities or personal needs.
There’s truth in the old adage that it takes money to make money, but that doesn’t mean you have to be already wealthy to invest. Triple net properties are stable, low-risk, and low-maintenance investments with a reliable return. Sure, paying with a big bag of cash saves time and money in the long run. And no doubt that would be fun. But if you don’t have a big bag of cash, borrowed funds give you the leverage needed to increase your investment power.
Investing in a triple net property has clear tax advantages. There are depreciation benefits, accelerated depreciation, and expense write-offs, to name a few. When you finance your NNN, you can also write off the interest paid for the loan. When considered as a whole, the financial advantages to owning an NNN outweigh concerns over costs related to financing.
If you’re still unsure about financing an NNN, the experts at Net Lease World suggest hiring a triple net lease advisor. A triple net lease advisor is a professional in the field of NNN. They will put their years of experience to work for you, helping you decide if the property you’re interested in is a good choice for financing. The bottom line for most investors is that taking on a low-interest loan is better than missing out on a great opportunity.