--- title: Why Is It Called a Net Lease? description: The net lease structure shifts a portion or all of these expenses from the landlord to the tenant, resulting in a image: https://www.realized1031.com/hubfs/Images/UI/Background/netlease-nnn-ebook-lp-landscape-background.jpg --- [![Realized 1031 Exchange Marketplace](https://www.realized1031.com/hs-fs/hubfs/Images/Brand/Logo/Realized/Realized-Logo-Black.png?width=240&height=80&name=Realized-Logo-Black.png "Realized 1031 Logo") ](https://www.realized1031.com/) - [Wealth Management Gap](https://www.realized1031.com/the-wealth-management-gap) - [Our Process](https://www.realized1031.com/how-realized-works) - [Financial Advisors](https://www.realized1031.com/advisor) - [Resources](https://www.realized1031.com/resources) - [The Company](https://www.realized1031.com/about-us) - [Articles](https://www.realized1031.com/blog) [Register](https://www.realized1031.com/marketplace) [Log In](https://www.realized1031.com/login) - Better Business Bureau Rating: **A+** - [FINRA BrokerCheck](https://brokercheck.finra.org/firm/summary/22333) - [Call](tel:1-877-797-1031) **(877) 797-1031** # Why Is It Called a Net Lease? Posted Jul 2, 2023 ![netlease-nnn-ebook-lp-landscape-background](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Background/netlease-nnn-ebook-lp-landscape-background.jpg?width=1024&height=746&name=netlease-nnn-ebook-lp-landscape-background.jpg) Real estate leases come in various forms, each with its own set of terms and conditions. One type of lease commonly used in commercial real estate is the net lease.  ### Defining the Net Lease: A [net lease](https://www.realized1031.com/blog/what-is-an-example-of-a-net-lease) is a contractual agreement between a landlord (lessor) and a tenant (lessee) that outlines the tenant's responsibility for paying additional expenses associated with the property. These expenses often include property taxes, insurance premiums, and maintenance costs in addition to the base rent. The net lease structure shifts a portion or all of these expenses from the landlord to the tenant, resulting in a "net" payment received by the landlord. ### Understanding the Origin: The term "net lease" derives its name from the concept of the landlord receiving a net amount after deducting expenses from the rent collected. It emphasizes the idea that the landlord's income is net of certain costs that the tenant bears. ### Different Types of Net Leases: Net leases are classified into different categories based on the expenses the tenant pays. The three primary types of net leases are: #### Single Net Lease (N Lease) In a [single net lease](https://www.realized1031.com/blog/the-basics-of-single-tenant-net-leased-stnl-or-nnn-properties), the tenant pays the base rent plus a portion of the property taxes assessed on the leased space. The [landlord](https://www.realized1031.com/blog/what-does-a-landlord-pay-in-a-single-net-lease) remains responsible for other expenses, like insurance and maintenance costs. #### Double Net Lease (NN Lease) With a [double net lease](https://www.realized1031.com/blog/what-are-the-pros-and-cons-of-a-double-net-lease-nn-property), the tenant is responsible for the base rent, property taxes, and insurance premiums. The landlord typically keeps the responsibility for structural repairs and maintenance. #### Triple Net Lease (NNN Lease) The [triple net lease](https://www.realized1031.com/blog/triple-net-lease-examples-to-consider) is the most common type in commercial real estate. In a triple net lease, the tenant assumes the responsibility for the base rent, property taxes, insurance premiums, and all maintenance and repair costs. The[ landlord](https://www.realized1031.com/blog/what-is-the-landlord-responsible-for-in-a-triple-net-lease) receives the rent amount "net" of these expenses. ### Advantages and Considerations: The net lease structure offers benefits for both landlords and tenants. For landlords, it provides a predictable stream of income while reducing the financial burden of property expenses. Tenants‌ gain more control over the property and can better manage their costs. Additionally, net leases are often long-term agreements, providing stability and allowing tenants to establish their businesses in a specific location. However, it is essential for both parties to thoroughly understand the lease terms and associated costs. Tenants should carefully assess their ability to cover additional expenses, while landlords should consider factors such as the creditworthiness of the tenant and potential risks associated with property maintenance. This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Realized does not provide tax or legal advice. This material is not a substitute for seeking the advice of a qualified professional for your individual situation. Download The Guide To Net Lease Properties [![The Investor's Guidebook To Net Lease](https://www.realized1031.com/hs-fs/hubfs/Images/UI/graphics/composites/Net-Lease-eBook-250.png?width=250&height=250&name=Net-Lease-eBook-250.png "Learn More About Net Lease ...") ](https://www.realized1031.com/blog/why-is-it-called-a-net-lease#blogform) Download eBook ---   --- ### The Investor's Guidebook To Net Lease ![Download The Guide To Net Lease Properties](https://www.realized1031.com/hs-fs/hubfs/Images/UI/graphics/composites/Net-Lease-eBook-550.jpg?width=550&height=650&name=Net-Lease-eBook-550.jpg) Learn More About Net Lease Investments. By providing your email and phone number, you are opting to receive communications from Realized. If you receive a text message and choose to stop receiving further messages, reply STOP to immediately unsubscribe. Msg & Data rates may apply. To manage receiving emails from Realized visit the Manage Preferences link in any email received. Search ### [Why Realized](https://www.realized1031.com/why-realized) - [Wealth Management](https://www.realized1031.com/the-wealth-management-gap) - [Why Realized](https://www.realized1031.com/why-realized) - [Our Process](https://www.realized1031.com/how-realized-works) - [Scenarios](https://www.realized1031.com/scenarios) - [Private Client Program](https://www.realized1031.com/private-client) - [Realized Exchange Services](https://www.realized1031.com/realized-exchange-services) ### [The Company](https://www.realized1031.com/about-us) - [The Team](https://www.realized1031.com/about-us) - [FAQ](https://www.realized1031.com/frequently-asked-questions) - [Testimonials](https://www.realized1031.com/testimonials) - [Press](https://www.realized1031.com/press) - [Careers](https://www.realized1031.com/careers) ### [Partners](https://www.realized1031.com/partners) - [Financial Advisors](https://www.realized1031.com/advisor) - [Broker Dealers](https://www.realized1031.com/partners/broker-dealers) - [Real Estate Agents](https://www.realized1031.com/partners/real-estate-agents) - [Certified Public Accountants](https://www.realized1031.com/partners/certified-public-accountants) ### [Resources](https://www.realized1031.com/resources) - #### Learn - [Articles](https://www.realized1031.com/blog) - [Glossary of Terms](https://www.realized1031.com/glossary) - [Capital Gains Tax Rates](https://www.realized1031.com/capital-gains-tax-rate) - #### Watch - [Video Library](https://www.realized1031.com/videos) - [Webinar Archive](https://www.realized1031.com/webinars) - #### Read - [Delaware Statutory Trust](https://www.realized1031.com/delaware-statutory-trust) - [Tenants-In-Common](https://www.realized1031.com/tenants-in-common-tic) - [1031 Exchange](https://www.realized1031.com/1031-exchange) - [Qualified Intermediary](https://www.realized1031.com/qualified-intermediary) - [Qualified Opportunity Zones](https://www.realized1031.com/opportunity-zones) #### Realized - 500 W 13th Street Austin, TX 78701 - (877) 797-1031 ##### [Contact Us](https://www.realized1031.com/contact-us) - [![Realized on Facebook](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Social/Icons/Mix/social-facebook-whiterev.png?width=60&height=60&name=social-facebook-whiterev.png)](https://www.facebook.com/Realized/) - [![Realized on LinkedIn](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Social/Icons/Mix/social-linkedin-whiterev.png?width=60&height=60&name=social-linkedin-whiterev.png)](https://www.linkedin.com/company/realized/) - [![Realized on YouTube](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Social/Icons/Mix/social-youtube-whiterev.png?width=60&height=60&name=social-youtube-whiterev.png)](https://www.youtube.com/c/Realized1031?sub_confirmation=1) - [![Realized Holdings, Inc. BBB Business Review](https://www.realized1031.com/hs-fs/hubfs/Images/professional-assoc/bbb/RZH2-bbb-seal.png?width=40&height=65&name=RZH2-bbb-seal.png)](http://www.bbb.org/central-texas/business-reviews/real-estate-investors/realized-holdings-llc-in-austin-tx-1000112948/#bbbonlineclick) - [![FEA Logo](https://www.realized1031.com/hs-fs/hubfs/Images/professional-assoc/fea/RZH2-fea-logo.png?width=82&height=65&name=RZH2-fea-logo.png "FEA Logo")](https://www.1031.org) SECURITIES DISCLOSURE Realized1031.com is a website operated by Realized Technologies, LLC, a wholly owned subsidiary of Realized Holdings, Inc. (“Realized Holdings”). Securities and/or Investment Advisory Services may be offered through Registered Representatives or Investment Advisor Representatives of Realized Financial, Inc. ("Realized"), a broker/dealer, member [FINRA](https://www.finra.org)/[SIPC](https://www.sipc.org/), and registered investment adviser. Realized is a subsidiary of Realized Holdings, Inc. ("Realized Holdings"). Check the background of this firm on [FINRA's BrokerCheck](https://brokercheck.finra.org/firm/summary/22333). Hypothetical example(s) are for illustrative purposes only and are not intended to represent the past or future performance of any specific investment. Investing in alternative assets involves higher risks than traditional investments and is suitable only for sophisticated investors. Alternative investments are often sold by prospectus that discloses all risks, fees, and expenses. They are not tax efficient and an investor should consult with his/her tax advisor prior to investing. Alternative investments have higher fees than traditional investments and they may also be highly leveraged and engage in speculative investment techniques, which can magnify the potential for investment loss or gain and should not be deemed a complete investment program. The value of the investment may fall as well as rise and investors may get back less than they invested. This site is published for residents of the United States who are accredited investors only. Registered Representatives and Investment Advisor Representatives may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed until appropriate registration is obtained or exemption from registration is determined. Not all of services referenced on this site are available in every state and through every representative listed. For additional information, please contact the Realized Compliance department at 512-472-7171 or info@realized1031.com. - [Terms & Conditions](https://www.realized1031.com/terms-and-conditions) - [Privacy Policy](https://www.realized1031.com/privacy-policy) - [Form CRS](https://www.realized1031.com/hubfs/common-files/disclosures/FormCRS.pdf) - [ADV 2A](https://www.realized1031.com/hubfs/common-files/disclosures/ADV2A.pdf) - [Reg BI Disclosures](https://www.realized1031.com/hubfs/common-files/disclosures/RegBI.pdf) -   © 2026 Realized Holdings, Inc. ```json { "@context" : "http://schema.org/", "@type" : "BlogPosting", "articleBody" : "Real estate leases come in various forms, each with its own set of terms and conditions. One type of lease commonly used in commercial real estate is the net lease. Defining the Net Lease: A net lease is a contractual agreement between a landlord (lessor) and a tenant (lessee) that outlines the tenant's responsibility for paying additional expenses associated with the property. These expenses often include property taxes, insurance premiums, and maintenance costs in addition to the base rent. The net lease structure shifts a portion or all of these expenses from the landlord to the tenant, resulting in a \"net\" payment received by the landlord. Understanding the Origin: The term \"net lease\" derives its name from the concept of the landlord receiving a net amount after deducting expenses from the rent collected. It emphasizes the idea that the landlord's income is net of certain costs that the tenant bears. Different Types of Net Leases: Net leases are classified into different categories based on the expenses the tenant pays. The three primary types of net leases are: Single Net Lease (N Lease) In a single net lease, the tenant pays the base rent plus a portion of the property taxes assessed on the leased space. The landlord remains responsible for other expenses, like insurance and maintenance costs. Double Net Lease (NN Lease) With a double net lease, the tenant is responsible for the base rent, property taxes, and insurance premiums. The landlord typically keeps the responsibility for structural repairs and maintenance. Triple Net Lease (NNN Lease) The triple net lease is the most common type in commercial real estate. In a triple net lease, the tenant assumes the responsibility for the base rent, property taxes, insurance premiums, and all maintenance and repair costs. The landlord receives the rent amount \"net\" of these expenses. Advantages and Considerations: The net lease structure offers benefits for both landlords and tenants. For landlords, it provides a predictable stream of income while reducing the financial burden of property expenses. Tenants‌ gain more control over the property and can better manage their costs. Additionally, net leases are often long-term agreements, providing stability and allowing tenants to establish their businesses in a specific location. However, it is essential for both parties to thoroughly understand the lease terms and associated costs. Tenants should carefully assess their ability to cover additional expenses, while landlords should consider factors such as the creditworthiness of the tenant and potential risks associated with property maintenance.", "articleSection" : [ "Net Lease" ], "author" : { "@type" : "Person", "email" : "marketing@realized1031.com", "image" : "", "name" : "The Realized Team", "url" : "https://www.realized1031.com/blog/author/the-realized-team" }, "dateModified" : "2023-07-02T16:00:00+0000", "datePublished" : "2023-07-02T16:00:00+0000", "description" : "The net lease structure shifts a portion or all of these expenses from the landlord to the tenant, resulting in a \"net\" payment received by the landlord.", "headline" : "Why Is It Called a Net Lease?", "image" : { "@type" : "ImageObject", "height" : 746, "url" : "https://733513.fs1.hubspotusercontent-na1.net/hubfs/733513/Images/UI/Background/netlease-nnn-ebook-lp-landscape-background.jpg", "width" : 1024 }, "mainEntityOfPage" : "https://www.realized1031.com/blog/why-is-it-called-a-net-lease", "name" : "Why Is It Called a Net Lease?", "publisher" : { "@type" : "Organization", "address" : { "@type" : "PostalAddress", "addressCountry" : "USA", "addressLocality" : "Austin", "addressRegion" : "TX", "postalCode" : "78701", "streetAddress" : "500 W 13th Street " }, "logo" : { "@type" : "ImageObject", "height" : 60, "url" : "http://www.realized1031.com/hubfs/Images/Brand/Logo/Realized/Realized-Logo-Black-No-Margin-296x60-AMP.png", "width" : 296 }, "name" : "Realized" }, "thumbnailUrl" : "https://733513.fs1.hubspotusercontent-na1.net/hubfs/733513/Images/UI/Background/netlease-nnn-ebook-lp-landscape-background.jpg" } ```