Crucial Facts You Need To Know About Investment Grade Tenants
It is the large national companies that issue public bonds are the ones that are also given credit rating. Some have credit store and this s its counterpart. You will be able to see a number of different agencies that provides the credit rating of the corporation.
When you are talking about credit rating, you will be able to see two kinds of categories. The rating of BBB to Baa3 is considered as an investment grade. You will probably get a non-investment grade the moment that the rating will not reach the former. The moment that you are rated as an investment grade company, the is a very low chance that you will not be able to pay out the credit that you have. 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.
For the large companies and medium-sized companies, there are already a large number of them that already got an investment grade rating. It is the tenants that made the lease that are called as credit tenants and when they lease a property, referred to as a credit lease.
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. It is when you have a credit tenant in your building that the property value of it will increase as well. If the credit tenants have a long term lease, then you can definitely get this advantage. The insurance, operating expenses, taxes of the property can be handled by the tenant in what is called as a triple net lease which is an added benefit to the owner of the building. There will be better control of the property on the side of the tenant without thinking much of the landlord. The moment that this setup is used, the rent will be much lower.
It is when you are a building owner that you should make sure that you will consider the credit strength of your tenant. 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. There is an investor guide that will take help you in completing the exchange.
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. The length of the lease is the one that will match the loan term. The responsibilities will be carried out by the tenant and not the landlord.
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