Net Lease

AAA

DEFINITION of 'Net Lease'

A provision that requires the tenant to pay a portion or all of the taxes, fees and maintenance costs for the property in addition to rent. Net lease requirements are most commonly used with commercial real estate. There are three primary types of net leases: single (net), double (net-net) and triple (net-net-net).


Also referred to as a closed-end lease.

INVESTOPEDIA EXPLAINS 'Net Lease'

Property owners use net leases in order to shift the burden of managing taxes, insurance and fees to the tenant, and may charge less rent as a result. Though potential tenants may not have to pay as much rent they are still required to pay taxes and fees regardless of how well their business performs, making this an added risk.

RELATED TERMS
  1. Double Net Lease

    An agreement in which the tenant is responsible for both property ...
  2. Gross Lease

    A type of commercial lease where the landlord pays for the building's ...
  3. Triple Net Lease

    A lease agreement that designates the lessee (the tenant) as ...
  4. Lease

    A legal document outlining the terms under which one party agrees ...
  5. Net-Net

    A value investing technique in which a company is valued solely ...
  6. Investment Real Estate

    Real estate that generates income or is otherwise intended for ...
Related Articles
  1. Entrepreneurship

    Prepare To Sell Your Business

    Follow these tips to ensure you get the most out of your hard work.
  2. Home & Auto

    7 Steps To A Hot Commercial Real Estate Deal

    For savvy real estate investors, times of lower prices reveal investment opportunity.
  3. Entrepreneurship

    Find Fortune In Commercial Real Estate

    Investing in big buildings means big money - and bigger risks.
  4. Bonds & Fixed Income

    Uncovering Hidden Debt

    Understand how financing through operating leases, synthetic leases, and securitizations affects companies' image of performance.
  5. Options & Futures

    Defeasance Reduces Commercial Real Estate Fees

    Try this alternative to short-term variable-rate financing when using leverage to buy property.
  6. Economics

    What is Earnest Money?

    An earnest money deposit shows the seller that a buyer is serious about purchasing a property.
  7. Mutual Funds & ETFs

    Want Emerging Market REIT Exposure? Eye These ETFs

    It's possible (and easy) to invest in emerging market real estate from the United States — just look at these REIT ETFs.
  8. Personal Finance

    Why These Could Be 2015's 10 Best REITs

    If you want to get on the REIT money train, then you better hurry up. However, the REITs covered here have potential beyond 2015.
  9. Personal Finance

    How To Buy A Beach Condo In The Philippines

    Foreigners can't buy land in the Philippines – but they can buy condos. Here's how to get one at the beach.
  10. Credit & Loans

    Is Now the Right Time to Buy a House?

    Thinking of buying a home? Consider these factors first.

You May Also Like

Hot Definitions
  1. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  2. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  3. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  4. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  5. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
  6. Accrued Interest

    1. A term used to describe an accrual accounting method when interest that is either payable or receivable has been recognized, ...
Trading Center