NNN or triple net properties are great investment opportunities for baby boomers, attorneys, doctors, retirees, or any other investor that seeks to have another income source.
The reason is that with NNN properties, you don’t need to be fully involved in the property management responsibility required of other investment property owners.
On the other hand, the tenant carries the entire property operating expenses, including insurance, tax, and maintenance. Thus, NNN leased properties are perfect for investors that seek passive income opportunities that’ll produce a steady income stream over the long term.
Drug stores like Rite Aid are recognized tenants of NNN properties. Besides providing a solid, secure ROI to the investor, drugstore properties usually sell at lower prices compared to other NNN properties.
These features make investing in the biggest drugstore chains in the United States like Rite Aid real estate properties intriguing and sought after.
Reasons to Consider Rite Aid As a Viable NNN Investment Option
The following are reasons to consider NNN Rite Aid properties for sale as a viable investment option:
Strong Tenants Attraction
Triple net properties thrive very well due to financially strong tenants, otherwise called investment-grade tenants, meaning that they have a higher BBB credit rating. Credit ratings refer to the company’s financial stability and are determined by Fitch, Moody’s, and Standard and Poor (S&P).
McDonald’s, Walgreens, Dollar General, AutoZone, and Rite Aid are some well-known investment-grade tenants. These companies have franchises backed by the parent company, which gives them financial support to ensure their success. The parent company also offers financial aid to the franchises when they experience bankruptcy.
Suitable for Buy And Hold Investing
In real estate, investors can make money through different means, including renovating a building and reselling it when the equity increases.
Another real estate investment method that investors choose is buying and developing land. However, some investors prefer running an office complex or shopping center.
Triple net leases like Rite Aid investments are perfect for investors that seek to “buy and hold.” They offer a regular profit source that will accumulate equity over time once they’re in excellent condition, have a long-term lease of about ten to 25 years, with quality tenants in great locations.
Investors enjoy receiving regular paychecks every month for the lease term under NNN Rite Aid properties for sale which is why retirees appreciate this form of investment.
Require Minimal Management
A triple net lease confers the entire financial burden on the tenant’s hand because it requires little management from the owner, seeing as the tenant handles all the property’s operating expenses, including property maintenance, taxes, and insurance.
The lack of financial obligation and simplicity makes the triple net lease beneficial for investors. However, these terms offer the tenant some degree of control. Tenants enjoy greater autonomy from the NNN lease agreement and won’t have to wait for weeks before the landlord can come for property maintenance.
Naturally, when investing in real estate, investors often go for properties that aren’t far from where they stay. If you’re going to manage the company yourself, it’s best to buy a property close to your residence.
On the other hand, investors who buy NNN properties aren’t limited by location. Regardless of where you are and where you’d want to buy a property, you’ll always see Rite Aid real estate property for sale that matches your budget.
These tenants prefer quality locations with heavy traffic, a growing population, and the presence of well-established national tenants. Once these features are present, your triple net property will attract a reputable and solid company as a long-term tenant.
Diversify Your Investment Portfolio
Triple net leases are vital components of a sophisticated investment portfolio. They’re low-risk property that delivers steady passive income with zero management required.
A stable, long-term, and lucrative asset like NNN Rite Aid properties for sale allows an investor to diversify their portfolio and achieve an imperative balance dynamic.
Furthermore, acquiring a triple net lease property offers an investor the opportunity to handle other hands-on, high-risk investments. These characteristics of a triple net property help in investment portfolio diversification to avoid market fluctuations.
About Rite Aid
Rite Aid is a drugstore operating in 17 states with approximately 2,437 stores and the Columbia district. As the third-largest drugstore company in the United States and the largest on the East Coast, this Fortune 500 company is a viable NNN real estate investment option to diversify your portfolio.
Rite Aid franchises offer prescription drugs and other general merchandise otherwise known as front-end products by the brand to its customers. These front-end products comprise health and beauty aids, cosmetics, convenience foods, over-the-counter medications, greeting cards, beverages, seasonal merchandise, photo processing, household items, and other convenience products.
Rite Aid offers about 3,300 products under its private brand. The company operates a 20-year triple-net lease term with a 10 percent rental increase every ten years.
Tips for Buying Drugstore Properties
Triple net investments, especially drugstores like NNN Rite Aid properties, are fast becoming investors’ favorite. The following valuable tips will come in handy when finding a drugstore like Rite Aid for your investment goal.
Buy a property with more than average sales. However, not every drugstore reports its total store sales. Therefore, you might have difficulty determining the sales total. Fortunately, if the drugstore’s pharmacy is open 24 hours, that means the location is excellent and will draw many customers.
Once a building you intend to buy has the specifications drugstores want, there won’t be any problem renewing the lease from your current tenant.
Some investors can buy a drug store with a zero cash flow and drop less than 15 percent of the purchase price while borrowing the balance. However, the property income generated is used to pay for the loan, which shouldn’t be more than 20 years.
The Bottom Line
Triple net investment is perfect for investors who’ve had ill luck investing in other real estate investment options. The profit from NNN investments will cancel the loss from the other failed investments.
Numerous benefits come with investing in a triple net lease like Rite Aid, including earning passive income. Suppose you’d want to invest in drugstore triple net properties; contact Buy NNN Properties today to see the available companies on our listing.