There are many types of leases in the world of property and real estate. Some favor tenants, others lean in favor of landlords, and each one comes with its own set of fine print. One of the most common (and often misunderstood) is the triple net lease. In simple terms, it means the tenant pays for property expenses on top of the regular rent. So if you’re about to sign a lease like this, pause right there. I’ve got some key info you’ll want to know before making any commitments. Let’s break down the triple net lease in plain, simple language.
Understanding the Triple Net Lease (NNN)
You cannot sign something if you are unsure what it is. So, what is a triple net lease really? Let’s go through the basics.
A triple net lease, often written as NNN, is a type of commercial lease where the tenant is responsible for paying three big things in addition to the base rent:
- Property taxes
- Insurance
- Maintenance costs, including common area maintenance (CAM), like the parking lot or exterior landscaping
These three costs are the “nets” in NNN, which is why folks often ask: “What does NNN stand for?” Easy, it stands for Net Net Net: taxes, insurance, and maintenance.
The NNN meaning is simple: You’re renting a space, but you’re also covering most of the operating expenses that come with it.
The important thing to note here is that it’s very different from a gross lease, where the landlord pays most of these costs and just charges you one bundled rent. So, when comparing gross rent vs. triple net, NNN gives you lower base rent but more responsibilities.
I hope it clears up the concept pretty much.
Advantages of a Triple Net Lease (NNN)
Credit: realized1031.com
So, now the main question is, why would a tenant agree to cover all those extras? Good question. Turns out, NNN leases can be pretty attractive if you know what you’re doing.
Here’s what good comes along with triple net lease.
Lower Base Rent
Your base rent will be lower. Why? Because the tenant pays the property expenses, the base rent is usually lower than other types of leases. That makes it a win if you’re trying to reduce fixed costs.
More Control
And who doesn’t want more control over their place? It can happen. With a triple net lease NNN, you have more say in how the space looks and functions. Want to repaint, upgrade the lighting, or re-landscape the front? You’ve got control because the tenant is responsible for maintenance. Perfect for a person like me.
Long-Term Stability
Many NNN lease agreements last 10–20 years. That kind of security is golden for brands looking to build customer trust in one location.
Great for Franchise Models
Triple-net leased properties are common with national chains and franchises. They offer a plug-and-play model for growth, with control over your environment.
Disadvantages of a Triple Net Lease (NNN)
Credit: hcrealtygroup.com
Now, let’s talk about the dark side. There are some serious risks with NNN setups, especially if you’re not financially ready for them.
Unpredictable Property Expenses
Folks, even though your base rent is lower, the extra costs can sneak up on you. Tax and insurance rates may rise, and you’re the one footing the bill.
Surprise Repairs
Bad luck doesn’t knock at the door. In many cases, the tenant pays for everything from leaky roofs to HVAC replacements. That could mean big-ticket costs you weren’t expecting.
Risky for Small Businesses
If you’re still working hard to be financially stable, taking on full property management responsibilities and fluctuating costs can be overwhelming. This isn’t the lease for someone testing the waters.
Less Flexibility
Most triple net leases are long-term. Breaking them early? Not easy, and definitely not cheap.
Now that you know everything, you can make an informed decision while signing a lease agreement.
One Important Note
Okay, so before you sign any lease, ask: “What does the landlord pay in triple net lease?” The answer might surprise you. Some landlords still cover structural repairs or specific costs, so always clarify that in writing.
Also, get estimates on CAM charges, property taxes, and insurance premiums before agreeing to anything. These aren’t just numbers, they’re part of your monthly survival.
What Are Single and Double Net Leases?
If triple net lease sounds like too much, you might want to know about single net and double net leases.
- A single net lease means you pay base rent + property taxes.
- A double net lease means you pay base rent + taxes and insurance.
In both, the landlord pays for maintenance. So they’re kind of a “middle ground” between a gross lease and an NNN lease. I think it’s pretty clear now.
Tenants and Triple Net Lease – Who Is It For?
So, who signs these things?
Triple net leases are ideal for property owners looking for hands-off investing. They provide a reliable income opportunity because the tenant is responsible for everything.
For tenants, NNN leases work best when:
- You want control over your building and brand
- You’re in it for the long haul
- You’re financially stable enough to handle operating expenses
Just remember, NNN isn’t for every business. Know your numbers and your limits.
Why Work With Us?
Leases can be tricky, but you don’t have to figure them out alone.
At Artemis Advisory Services, we help both tenants and property owners make smarter, safer decisions, not just about leases, but about the bigger real estate picture. From breaking down the NNN meaning to helping you navigate commercial lease negotiations, we bring clarity to contracts and confidence to your choices.
Our team blends financial insight with real estate know-how to help you avoid costly mistakes, structure better deals, and align your lease with your long-term goals.
👉 Check out our full range of Real Estate & Advisory Services, and let’s make sure you sign a lease that works for your business, not against it.
Because in real estate, every line in the lease matters. Let Artemis help you stand on solid ground.
Risks of NNN You Shouldn’t Ignore
Let’s talk about the risks of NNN leases.
- You’re on the hook for everything, from the broken toilet to the fire insurance.
- If property taxes or insurance premiums go up, you pay more—even if your sales are down.
- You might have to maintain things outside your actual space, like the parking lot or lobby.
- You lose flexibility, especially if your business needs change mid-lease.
- Not understanding the rules of NNN can lead to expensive mistakes.
In short, know what NNN income opportunity means; it means opportunity for some, and risk for others.
Ending Remarks
By now, you should have a solid grasp on what a NNN lease is and why it’s such a hot topic in commercial real estate.
To recap:
- A triple net lease gives tenants more control and lower base rent, but more responsibility.
- You pay for taxes, insurance, and maintenance, on top of rent.
- It’s great for strong businesses, but risky for beginners.
- Ask the right questions, compare it to a modified gross lease, and know your numbers.
Still unsure whether triple net lease NNN is the right path for your business? Connect with Artemis and let’s talk it out.
Because in the world of real estate, signing smart is everything, and understanding what NNN means could save your future.
