Crucial Facts You Need To Know About Investment Grade Tenants
Most of the time, credit rating is given to large national companies that issue public bonds. 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. It is the agencies that give out the rating that constantly checks the financial status of every company and the rating will change over time.
For the large companies and medium-sized companies, there are already a large number of them that already got an investment grade rating. 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.
One sure fact the moment you have a credit tenement that leases your property is that you will get the monthly payment every time if you are there of the property. Once there will be credit tenants that lease your property, the building that you own will have a higher property value. It is this advantage that you will get the moment that your credit tenants will have a long-term lease on your property. An added benefit to the owner of the building which is called as a triple net lease is when a tenant will handle the insurance, operating expenses, taxes of the property. There will be better control of the property on the side of the tenant without thinking much of the landlord. But the landlord must also know that this set up will have lower rent.
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. You have to make sure that this exchange will not be difficult. There is an investor guide that will take help you in completing the exchange.
It is the institutional investor that will provide the credit-tenant financing and they will not often have any obligations with regards to the landlord. The reason for this is because of the triple net terms. When it comes to the loan term, it will match the length of the lease. The landlord will not be thinking of anything as the tenant will carry the responsibilities.
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