Crucial Facts You Need To Know About Investment Grade Tenants
Any large national companies that issue public bonds are being given credit rating. This is the counterpart of a credit store. The rating that is given to each company is determined by several agencies.
There are basically two categories when it comes to the credit ratings. The rating of BBB to Baa3 is considered as an investment grade. It is by not reaching the former rating that the credit rating that you will get with your company is a non-investment grade. It is when you will get an investment grade rating that the credit that you have had a very low chance of it not getting paid. The financial status of every company is being checked once in a while by the agencies that provide the ratings that is why the ratings will change over time as well.
An investment grade rating has already been given to a number of different big companies as well as medium-sized companies. The moment that these companies will lease a property, then it is called as credit lease and the tenants that leased the property is called as credit tenants.
The moment that the owner of the building will have credit tenants, then he will be ensured that he will get the payment every time as the business continues. Once there will be credit tenants that lease your property, the building that you own will have a higher property value. If the credit tenants have a long term lease, then you can definitely get this advantage. It is when a triple net lease is made that the owner of the building will get additional benefit as the tenant will cover the insurance, operating expenses, taxes of the property. The tenets in the other hand will also have better control of the property without thinking much of the landlord. But the landlord must also know that this set up will have lower rent.
The tenant that will lease your property should be considered by you when you are the building owner. Before the bank lends you money, they will first check the credit score that you have especially for your investment property. It should be that the exchange will not be difficult. In completing the exchange, there will be an investor’s guide.
It is because the institutional investors that will provide the credit-tenant financing, they will not be liable to any landlord. The triple net term is the one that covers this aspect. It is the loan term that will also match the length of the lease. The responsibilities will be carried out by the tenant and not the landlord.
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