NNN Properties For Sale in Florida
Florida has become a hotspot for real estate investments. Beyond its reputation for tourism, the state is a magnet for businesses and residents alike due to its pro-business policies and lack of state income tax. This growth is fueling demand for commercial real estate, making it an attractive market for investors seeking opportunities in retail, industrial, and other sectors.
Florida’s population is expanding by approximately 300,000 people annually, comparable to adding a new city the size of Orlando every year. This influx supports a robust economy and ensures sustained demand for goods, services, and the properties that house them.
As a tax-free state with a strong economic foundation, Florida is an ideal environment for triple net (NNN) properties, offering investors the potential for investments with steady income and minimal landlord responsibilities.
NNN Properties in Florida Overview
As mentioned, a NNN for sale in Florida offers a great deal of potential for appreciation and income for those looking to grow a real estate investment portfolio. This is attributed to the wide variety of businesses; there are over three million entities that exist at present, and because Florida is one of only nine tax-free states in the US.
This means that there’s a great deal of variety in the type of investment options available to investors, with the added benefit of more money in your pocket when investing as an individual, as you won’t be taxed at the state level for any income you gain from the investment. However, for incorporated businesses investing in property, it’s important to note that there are still taxes to be paid.
Triple Net Properties in Florida Overview | |
State population | 21.78 million |
Number of business entities | 3,316,012 |
Average cap rate | 5.34% |
Corporate income tax rate | 5.5% |
Personal income tax rate | None |
Capital gains tax rate | None |
Common NNN Lease Tenants in Florida
With more than three million business entities in the state, there is a great deal of variety and potential for investing in triple net properties in Florida. The most common NNN properties for sale in Florida are for tenants in the gas stations, convenience stores, automotive, and dollar store industries.
Of course, this doesn’t mean you won’t find other tenants within the state. These tenant types just happen to be the most widely available. When it comes to triple net leases, there’s a wide range of tenants available, including retail chains, fast food, banks, and healthcare. If you’d prefer to have your investment be with a QSR (quick service restaurant), healthcare, or any other commercial industry, you’ll still find options there.
Tenants you might recognize within these industries include Dollar General, Jiffy Lube, Circle K, Starbucks, and Dunkin Donuts. These brands have established a reputation that brings stability and consistent incomes for these tenants. For instance, Dollar General has seen significant revenue growth in recent years, and Starbucks earns billions in revenue each year. These stats and outstanding revenues bode well for commercial property investors looking for a stable and reliable investment option.
ID | Status | Tenant | Price | City | State | Cap Rate | Years | Lease Type | Year Built | Details |
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Why Choose a Net Lease Over a Gross Lease When Investing in Commercial Real Estate?
When it comes to choosing lease types for your investment property (or properties), you’ll often find two common types: a gross lease and a net lease. The key difference plays into how much responsibility falls onto the landlord rather than the tenant.
A net lease covers triple net leases, which are also known as NNN leases, and double net leases, also known as NN leases.
A triple-net lease is the most common. It offers the most passive income option for real estate investors because tenants take on additional costs and fees associated with the property. These extra costs include maintenance fees, insurance costs, and even property taxes.
A gross lease, on the other hand, requires a more hands on property owner. They incur all additional expenses, leaving their tenants with a fixed rent amount. This creates less predictability in the investment.
Within Florida, you’ll find both these types of lease options for your property investment.
What Types of Net Leases Are Common in Florida?
Most commonly, you’ll find triple net properties for sale in Florida. This form of lease is so common sense it’s often considered to be the most appealing because its a stable, passive income stream.
The stability comes from multiple factors within a net lease, such as the fact that the tenant is the one to take on any additional costs, so it requires very little intervention from the landowner or owners. This also means that there are few landowner responsibilities to take on. In addition to this, there’s also the fact that the lease periods are often quite long, ensuring a consistent rent income for years to come.
How to Evaluate a Net Lease for Sale in Florida
When it comes to evaluating NNN leases for sale in Florida as an investment option, there are a few key elements to review to decide if it's the right fit for you, your investment goals, and your potential tenant.
These things include the property value and the quality and quantity of the potential tenants. The property value incorporates many elements like location, surrounding population, and the age of the building. Most often, net lease tenants have expectations for the quality of the property and the demographics of the population around it to ensure they can meet their revenue goals as a business.
Evaluating your potential tenant is important because it impacts your cash flow. If it’s a single-tenant lease (which the majority of triple net leases are), then your entire income stream will be reliant on one tenant. This means you want to consider the creditworthiness of your potential client. You’ll want to assess the performance of the company and take into consideration who will be making payments towards rent (for example, are they franchised or corporate-rented buildings?). This allows you to assess how reliable your investment with this tenant will be in the long term.
A few other details to look at are the lease terms, duration, and cap rate. The lease terms typically outline what the tenant versus the landlord is responsible for, and the duration looks at how long the lease will be. In Florida, on average, the typical NNN lease is 14.5 years. These long-term leases decrease your chance of losing money on your investment by ensuring that you’ll never have vacancies and, in turn, will reliably have a rental income.
The cap rate refers to what you can expect to see as a return on your investment. On average, there’s a 5.3% cap rate on triple net leases in Florida. This places the cap rate within what’s considered to be a good rate of return, as typically, 5-6% is considered a good return on a net lease investment.
What Makes Florida an Attractive State for NNN Leases?
There are a number of things that make Florida an attractive state for NNN leases.
The biggest is that it’s a tax-free state. As mentioned, this means that you, as an individual, won’t have to pay taxes on any income you earn from your net lease investment. Of course, it’s important to note that at the federal level, your income will be taxed. But the advantages of a tax-free stat mean that your investment will have a greater appreciation value, bringing you in more money.
Another attractive aspect of the Florida state is the size of the population. Florida is home to millions of people, many of whom have spending power as the average annual income in the state is roughly $56,000, putting it right on average for the United States.
The state also brings in plenty of tourists, an estimated 9.8 million people, who make use of commercial properties and add to the economy of the state. With tourist attractions across the state, there’s potential to find an investment in various high-traffic areas that will create a more secure and stable investment.
The sheer number of businesses in Florida also creates a great deal of opportunity for investors, giving them a great variety of options for investment properties with varying degrees of landlord responsibilities, fees, and requirements.
In all, Florida is a place with a huge variety of opportunities for those starting or adding to their commercial real estate portfolio.