What is a STNL?
Single Tenant Net Lease Property
STNL, or Single Tenant Net Lease Properties, are those that are leased and occupied by a single tenant for the duration of the lease term. Lease terms generally range from 10 to 20 years. Examples of some of the tenants that occupy and lease these properties are McDonald’s, NAPA Auto Parts, Panera Bread, Tire Kingdom, Starbucks, Walgreens, BJ’s, Costco, Racetrac Petroleum, CVS, Rite Aid, Dollar General, Chick-fil-A, Verizon, AT&T, FedEx, and, any number of others you pass by every day.
The majority of these companies’ locations are not owned by the entity whose name is on the sign. Most are leased from investors, like you.
As an owner of a STNL property, you receive the monthly rent and the lease generally require the tenant, not the landlord, pay ALL of the additional expenses associated with the property such as operating expenses, taxes, insurance, repair and utilities. This means as the landlord you have little or no ongoing costs or management responsibilities..
In addition, since this type of investment is secured by the collateral of a long-term lease with a very strong tenant, and the underlying real estate, they are very low risk.
3 Reasons to consider STNL
Maintain Value (Bond-Like Investment)
STNL properties provide stable and predictable returns with low risk.
Tenant pays most expenses
Net Lease means the tenant is responsible for some of all of operating expenses, taxes, insurance, repairs and utilities.
Attractive for 1031 exchanges
Net leased properties are attractive to investors who want to take advantage of a 1031 tax-deferred exchange.
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