How to flip commercial tenant to Triple Net

[Nick Rivers]

I have a building that is commercial and residential. Tenant lives upstairs and operates business out of lower level. He pays utilities and I pay tax, insurance, snow removal.

If I wanted to give a longer term lease and make it triple net how does that work? Do they just pay the agreed lease amount and I just send them the insurance and tax bill whenever I get it? How do you make sure it’s getting paid?

Thanks!

[Greg Dickerson]

Originally posted by @Nick Rivers:

I have a building that is commercial and residential. Tenant lives upstairs and operates business out of lower level. He pays utilities and I pay tax, insurance, snow removal.

If I wanted to give a longer term lease and make it triple net how does that work? Do they just pay the agreed lease amount and I just send them the insurance and tax bill whenever I get it? How do you make sure it’s getting paid?

Thanks!

 You would address this in the lease. Make sure to talk to a commercial real estate attorney so you have the wording the way you want it. Basically you describe in the lease all the costs that are passed through to the tenant. You then bill the tenant but you would pay all the bills yourself directly.