Home » Net Lease Property Investing: 4 Reasons Why It’s Recession-Proof
The pandemic has hit us so hard that is has disrupted the economic cycle that has been going on for decades. But now, since the daily case has gone down, our lives are starting to get back to how it was, and masks are no longer mandatory in some countries, the global economy is picking up what it has left.
Unfortunately, the post-pandemic effect on the economy hasn’t gotten better yet. Especially with the war, inflation, and election coming up, things are soon going south.
Even The World Bank states that there might be a global recession as interest rates increase worldwide. Even the CEO of Goldman Sachs, David Solomon, said,
“There’s a reasonable chance of a recession in the U.S., but it’s not certain.”
While it’s still uncertain what’s waiting for us, preparing for the worst is always excellent. Therefore, it’s the perfect time to consider an investment option that can sustain you throughout the next recession: the triple net lease or nnn for sale
Why Triple Net Lease Is Recession Proof
When it comes to the triple net lease, there are a few reasons why it’s the best investment if we’re going into recession, and here is the list.
Triple Net Lease Isn’t Afraid Of Interest Rate
While the constant increment of interest rate directly influences other investments, such as bonds and the stock market, the triple net lease isn’t. Since the terms are preset for the next 10, 15, or even 20 years, even if the interest rate is soon to skyrocket, it can be mitigated by the built-in rent escalations.
Triple Net lease Is Low Risk
During the recession, traditional investments such as the stock market and bonds will most likely lose their power and even plummet for a while. On the other hand, at this time, liquidity is one of the strengths you need, but selling your stocks and bonds in a bearish market is just unwise.
Fortunately, with the terms of triple net lease property, the tenant covers the main expenses of owning a property. Therefore, you can rest assured that you will still gain a stable income while not having to pay any more expenses.
Triple Net Lease Gives You Stable Income
A recession doesn’t mean the economy and consumption stop. Foods will still be in demand, primary household appliances are still needed, and gas is still essential. That’s why having a triple net lease property with the right tenant and location can get you through the recession with flying colors.
Some of the best retail tenants to consider that are recession-proof are fast food, gas station, convenience stores, dollar stores, medical supplies and facilities, casual dining, and so on. The important thing is to choose one whose business is necessary for basic human living.
Also, don’t forget to always pay attention to your tenant’s credit ratings and business model. Those will be a considerably good indicator of whether they will survive the recession and give you a stable passive income or crumble and leave you with only headaches.
The Lenders love triple Net Lease
When it comes to financing from the banks, a triple net lease might just be the one thing the lenders are willing to finance. Not only willing, but most of the time, lenders typically provide generous loan terms. It’s because, for the lenders, a triple net lease property in a good location and tenant is a stable and resilient business to finance.
Ready To Find An NNN Property For Sale?
Choosing the first triple net lease property to invest in might seem scary sometimes. Because while it’s recession-proof and considered a low-risk investment, there are quite a few things you need to consider.
Rest assured, we got you covered. NetLeaseWorld is where you can find a broad choice of profitable NNN properties for sale from fast foods, convenience stores, banks, and pharmaceutical facilities.
Not only do we have a wide variety of options, but we also provide you with our opinion on which one is a good deal considering the local market prices and which ones are not. And if you need a bit of advice from our triple net lease advisors, contact us today to discuss all the questions you have regarding the triple net lease.