Triple Net (NNN)

A triple net, also known as a NNN lease, refers to a lease where the tenant pays all expenses for the property. The “NNN” literally stands for Net-Net-Net. The three nets on a property are taxes, insurance and maintenance costs. Those expenses are in addition to monies due for rent and utilities. The property owner receives a net amount since he or she is not responsible for the expenses related to the property. In contrast, a gross rental is one where the tenant pays a gross amount to the landlord who then takes out the expenses related to the property from that amount. The triple net lease is often found in lease agreements for free-standing commercial buildings. However, some residential lease agreements include these provisions as well. This type of lease is common for investors who do not want to manage a property but want the net results of their investment monthly.