Posts Tagged ‘leases’

Triple net leases are becoming more well loved in the Houston area. Here, they are obviously less expensive for the property owner, and can allow a truly passive form of income for the property owner. With one of Houston’s triple net leases, a property owner can be hands off, which is exactly what more and more property owners are looking for. Of course, there are down sides to them as well.
Most triple net leases give control of the property to the lessee, which can be either a excellent deal or a terrible deal, depending on who the property owner is dealing with. They provision the renter to pay for maintenance as well as other costs associated to property ownership.
Before ever purchasing one, potential owners should have these leases looked over by a Houston real estate attorney to be assured that the property owner can still control structural changes to the property as well as enforce the general maintenance that the property requires.
While a property owner can simply go online and download a lease agreement, these leases in particular can work against the owner of the property. Legally speaking, it is very hard for a property owner to deny liability for destruction of property, especially if they are being held accountable by a third party. A well written, clear and concise lease can help avert such situations.
Every triple net lease property for sale in Houston is going to vary at least in structural repair requirements. Many of them require the tenant to pay for everything except roof repairs while some require everything including roof repairs. A bond clause requires the tenant to pay for the property even if the property doesn’t exist anymore, such as the loss resulting from fire, flood, earthquake, or other natural disasters.
Triple net leases are a hard sell for potential tenants, regardless of whether you are referring to residential tenants or commercial tenants, and there has to be a motivation for the tenant. There is an exceptional amount of negotiation associated with them, and potential purchasers should yield to caution when entering a pre-existing lease.
Leases for sale with huge profit potential can be hard to find. They take a bit of cultivation, and a bit of finessing to make the perfect situation. If the tenant of a triple net lease is not worthy of the sale, the sale will often never materialize.
Both the landlord and the tenant can benefit from a triple net lease and can experience fantastic frustration from them too. Keeping in mind that the tenant who agrees to one needs to get something out of it, buy of a triple net lease in Houston can lead to more pitfalls than necessary if the situation hasn’t been scrutinized.
In most cases, residential leases in Texas are rare. It costs too much money. The only notable exception to that rule refers to some apartment buildings, usually units that house between 6 and 12 units. These can be an acceptable alternative to home ownership under the right circumstances. The vast majority of triple net properties in the area are commercial properties.
Finding an ideal triple net lease for sale in Houston or the surrounding area can be considered an impossible task. Because they are unique between landlord and tenant, most ideal situations are made rather than bought. Those leases which are up for sale are often excellent situations, but a potential owner is hard pressed to find a perfectly ideal situation unless they have made it for themselves.
Making one and then selling it can be ideal for those looking for a high end real estate business. Some of these leases are signed for as long as 50 years, offering up some very tempting terms for a potential buyer. After all, provided that the lease is signed for an extended period of time, the lease can provide a significant income-expense ratio for the owner. Additionally, the resale of one can also bring in revenue.
Anyone considering purchasing a triple net lease for sale in Houston should never consider the buy without the help of an attorney for the simple reason that these leases are personalized per situation.
A fantastic find will still be a fantastic find after a lawyer looks over the lease. A excellent find can turn into a fantastic find after an attorney evaluates the lease. Then of course, a lawyer can save you much headache and pain when it comes to a triple net lease that shouldn’t be touched with a single dollar.

While many people do not consider the possible use of a ground lease or land lease, ground leases offer a fantastic way to retain a long-term ownership interest in real property that can significantly benefit heirs, while providing a current income stream. Vacant land that an owner may not be able to develop on his own can also reach its full development potential sooner using a ground lease. Most ground leases are negotiated with a provision that calls for the small-term development of the land, and once developed land owners / landlords have a relatively small risk of loss. In Las Vegas, ground leases are used periodically but they have not been a mainstay in the real estate market. Given the cash crunch caused by the “Recession of 2008,” but, more land owners are considering them. Waiting for an end user to buy a property, when most cannot get bank financing, can be costly. A ground lease provides and alternative to waiting that appears to be promising in the current economic climate. Establishing a base return rate for a ground lease is not as hard as one might imagine. Learning the current market value of a property to be leased is the first step, and it is usually accomplished via an appraisal. With regard to the rate of return, if you were to sell a property for cash and invest the proceeds with as small risk as possible, you have established a base or minimal return figure. The near risk free rate paid on government treasury bonds is usually the base rate. Since more risk is associated with a ground lease than with holding government bonds a risk premium is usually added to the base rate. One of the largest issues associated with a ground lease in Las Vegas, as elsewhere, is position or subordination. If a developer is going to borrow money to improve a site, the lender generally wants to be in first position. Since the underlying land owner sees this request for subordination as a way to separate him from the land asset, and the bank feels its investment is larger and should be superior to the underlying land owner, some ground leases fail to materialized due to this security issue. Ground leases are most attractive to land owners when no financing is required for the development of improvements. Another difficulty establishing a ground lease is the provision regarding rental adjustments. The Consumer Price Index (CPI) adjustments is often built into building leases, and at times CPI adjustments are adopted in ground leases. CPI adjustments provide the tenant with some assurance that they will not be caught up in a revaluation due to an explosive land market. The downside of using a CPI adjustment for the land owner is that the land may dramatically increase in value over time and the land owner will be stuck with the contract terms negotiated based on a much lower value. Once established, the sum of the net present value of the income stream from a ground lease plus the discounted value of the remainder are the basis for value. So poorly structured ground leases can ruin the value of a parcel of real property. Thus, ground leases can be detrimental to an owner or tenant if not well crafted. I have personally evaluated a real property encumbered by a 99 year lease with a 60 year term remaining that provided the leased fee owners with a return so low that their heirs could not afford to pay the tax bill. I can’t reckon of anything worse than being conveyed an asset worth several million dollars that just costs you money every month and that will likely not provide you with a benefit during your lifetime. The opposite side of the coin is a lease that favors the owner so much that the tenant cannot afford to pay the monthly rent. Driving your leasehold tenant into bankruptcy is also not the best scenario for a long-term lease relationship. Under certain circumstances a ground lease can be beneficial to both a landlord / owner and a tenant. Recent market changes in Las Vegas have opened land owners to the possibility that a ground lease may be a valuable tool to get a deal transacted. Fantastic care must be taken to develop terms and legal provisions (with the aid of your attorney) that will remain reasonable over the life of the lease. Thus, the use of a ground lease in Las Vegas is being considered by owners and developers as a serious alternative to traditional land sales.

Or, if I can find a brief description and clear? Before you start a business plot, I have to educate myself on how the sales / dining room can be rented.

I know you debit the leased assets and credit the lease obligation, but what about the lease expenses?
Thanks.

Discuss leasee obligations such as retirement and asset maintenance, ways to handle variable lease payments, residual value guarantees, options to buy additional usage for bargain buys, options to extend and terminate a lease, initial and subsequent measurement for rights and obligations arising in a lease contract, revenue recognition, accounting for the leased item on the books the leasor, recognition and measurement of the leasors receivables.