Single Net Lease

See: Triple Net Lease.

Owning a home is great. We’ve got a place to live, we’re building equity, and no one can tell us we can’t paint all of our ceilings bright purple and cover them with those glow-in-the-dark stars. But owning a home is also expensive, and we’re not just talking about the mortgage payment. We’re talking about stuff like property taxes, insurance, and maintenance costs. Stuff that we maybe don’t think about every day, but it’s still there, lurking in the background...being expensive.

If we’re a landlord, we probably charge enough rent to offset the mortgage payment and cover that other stuff. (At least, if we’re a smart landlord, we’re charging enough to cover our expenses.) That type of lease is a “gross lease”: it covers everything. But there are also other types of leases designed to specifically cover certain ownership costs, and one of them is a “single net lease.”

A “single net lease” means that the tenant is responsible for paying the property taxes on the property. (For the curious, double net leases also include taxes and insurance, while triple net leases include those things plus maintenance costs.) A single net lease is especially helpful in an area where property taxes tend to fluctuate, like if the house is in a town experiencing significant economic growth. As a landlord, we no longer have to worry about a spike in property taxes, because under the terms of the single net lease, it’s not our problem anymore—it’s our tenant’s. Now we just need to worry about insurance and maintenance.