What You Need To Know About Investment Grade Tenants
Most of the time, credit rating is given to large national companies that issue public bonds. It is the one that is considered 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. The moment that it will not get pass this rating then it is considered as not 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. 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. If the credit tenants have a long term lease, then you can definitely get this advantage. 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. Without thinking much of the landlord, the tenant will have better control on the property. 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. It is when you have an investment property that the bank will also check the credit score that you have before they will be lending you money. You have to make sure that this 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 coverage of this factor is under the triple net terms. It is the loan term that will also match the length of the lease. It is the tenant that will be responsible for all of the factors involved and not the landlord.