Real Estate 101

Types of Lease Structures

The five main types of lease structures and what that means for you.

Nadine Anderson

Nadine Anderson

Types of Lease Structures

There are five major types of lease structures that vary primarily on what costs are the responsibility of the tenant. These costs may include property expenses like insurance, maintenance, and property taxes, on top of your rent.

Triple net-lease

With a triple net-lease ("NNN"), expenses for insurance, roof and common area maintenance, and property taxes are your responsibility, not your landlord’s. However, in this type of lease, you don’t pay these expenses upfront — your landlord does. Then, by calendar or fiscal year-end, you would fully reimburse your landlord.

Double net-lease

With most double net-leases ("NN or NN (R&S)"), insurance and property tax expenses are incurred by you as a tenant. It’s up to your landlord to pay for common area maintenance such as the roof, structure, and parking lot.

Absolute net-lease

Absolute net-leases ("Abs NNN") create a very passive income stream, as your landlord is not responsible for any expenses. All building expenses are directly paid for by you, as a tenant.

Single net-lease

Single net-leases ("net") aren’t too common. They require the landlord to pay for property maintenance along with another expense such as insurance or property taxes. You would incur the cost of all other expenses.

Gross lease

Unlike net-leases, gross leases come with a flat fee to the tenant that includes all expenses, like insurance, maintenance, and property taxes. They can also exclude extra expenses that you would typically pay for on your own, such as internet.

Lease Type

Tenant pays expense

Landlord pays expense

Triple net (NNN)

Pays upfront & gets reimbursed

Double net (NN or NN (R&S))

Absolute net (Abs NNN)

Single net (net)

Gross


For more information and to see what type of lease structure suits you best, reach out to us at hello@whykeyway.com