In this video, Joel, Principal Broker of NNN Invest, answers the question, “Does owning a single-tenant property help balance an investment portfolio?” Joel explains how the property is effected if the economy goes up or down, or if the stock market crashes. 

 

Should I have this type of investment in my portfolio? 

Having a single-tenant property in your investment portfolio can give the investor a good hedge with a lease that’s structured and provides stable and predictable expectations from the investment.

 

What happens if the economy or stock market changes? Does it affect this investment?   

Regardless of whether the economy goes up or down, or if the stock market is going sideways, you can have a predictable cash flow. Having a predictable cash flow coincides with having an investment grade tenant with the single net lease property.

 

I want a higher return, what can I do? 

If higher returns are wanted, purchasing apartment buildings, storage buildings, single-family houses, and more intensive assets can provide a higher yield. However, a single-tenant property typically offers a headache-free return and more of a dependable cash flow asset model. Single-tenant properties are often less volatile and tend to have a real estate investment cycle more stable and predictable than some of the other asset classes. A way to make higher yields investing in retail is to go higher in purchase price where cap rates rise such as 5,6,7 million and up in price versus 2 to 3 million OR an investor can invest passively in one of NNN Invest value add retail deals that usually have a higher overall total return.