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FGG 1031 - Buying Triple Net (NNN) Properties in a DST Property Triple net leased properties (NNN) are those where the leaseholder is obligated for paying for all taxes, insurance, maintenance for the real estate (the three nets). Triple net properties remain one of the most preferred asset classes for real estate investors who are seeking relatively low supervision responsibilities and stable cash flow. We would like to share some distinct views that investors have discussed with us that have caused many to think about other asset classes when looking at a DST ownership structure for triple net properties. Alignment of Loan Term with Lease Term - Most DSTs are funded with loans that are due in 10 years. Adjusting Rents to Suit Altering Market Conditions-- Leases in most NNN properties often restrict annual rent enhances to amounts that are bargained at the time that the lease was executed. Maintenance Monitoring-- While triple net leases need leaseholders to maintain their rented real estates, owners nevertheless need to stay vigilant and routinely inspect real estates to make sure that the lease obligations are being fulfilled. REIT Exit Solutions-- Some DST sponsors supply possibilities for investors of NNN properties to change their DST ownership into shares of a REIT later on. A REIT or Real Estate Investment Trust is another form of group ownership that many investors find attractive. This option may be particularly appealing if the REIT ownership shares are publicly traded and if the conversion from a DST to a REIT offers an opportunity for earlier liquidity and possibly added upside due to favorable future market conditions. Investors should understand that the conversion of DST ownership interests into REIT shares results in the decline of 1031 Exchange possibilities going forward. http://fgg1031.com That is, once the conversion to REIT shares is finished, the built up increase on the potential sale of those shares no longer be put off via a 1031 Exchange-- and tax effects are likely to result upon potential sale. We promote all investors who are looking at NNN leased properties to ask for our guidance to analyze pros and cons before concluding their investments. Article citations: nnn properties, triple net lease properties, 1031 real estate, nnn leased properties, exchanging real estate, triple net basis,1031 exchange reit, 1031 reits Triple net leased properties (NNN) are those where the lessee is accountable for paying for all taxes, insurance, maintenance for the real estate (the three nets). Triple net properties with less than 10 years remaining on their lease term can experience a loss of value due to enhanced perceived buyer risks that the leaseholder( s) may not renew or that new financing will be more tough and costly to obtain. Adjusting Rents to Suit Altering Market Conditions-- Leases in most NNN real estates often limit annual rent enhances to amounts that are bargained at the time that the lease was executed. Upkeep Monitoring-- While triple net leases call for leaseholders to maintain their rented real estates, owners nevertheless need to remain alert and periodically inspect real estates to make sure that the lease obligations are being suited.