What are the different types of real estate leases (e.g. gross, net)?
A real estate lease is a legally binding agreement that is used to define the terms and conditions of a rental arrangement. There are several types of real estate leases, including:
Gross lease: A gross lease is a type of real estate lease in which the tenant pays a fixed amount of rent that includes all operating expenses, such as property taxes, insurance, and maintenance. The landlord is responsible for paying these expenses out of the rent received.
Net lease: A net lease is a type of real estate lease in which the tenant pays a base rent, as well as a portion of the operating expenses. There are several types of net leases, including:
Single net lease: A single net lease is a type of net lease in which the tenant pays base rent, as well as a portion of the property taxes. The landlord is responsible for all other operating expenses.
Double net lease: A double net lease is a type of net lease in which the tenant pays base rent, as well as a portion of the property taxes and insurance. The landlord is responsible for all other operating expenses.
Triple net lease: A triple net lease is a type of net lease in which the tenant pays base rent, as well as a portion of the property taxes, insurance, and maintenance. The landlord is not responsible for any operating expenses.
Modified gross lease: A modified gross lease is a type of real estate lease that combines elements of both gross and net leases. The tenant pays a base rent, as well as a portion of some operating expenses. The specific operating expenses that are included may vary depending on the terms of the lease.
The type of real estate lease that is used will depend on the specific needs and goals of the parties involved in the transaction. It's a good idea to carefully consider the different types of leases and choose the one that is best suited to your needs.