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. It is the one that is considered the counterpart of a credit store. You will be able to see a number of different agencies that provides the credit rating of the corporation.
In a credit rating, you will be able to see two categories. The rating of BBB to Baa3 is considered as an investment grade. It is by not reaching the former rating that the credit rating that you will get with your company is a non-investment grade. 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.
There are a number of big and medium size companies that are already having 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.
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.
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.
With regards to the obligations to the landlords, the institutional investors is the one that will provide the credit-tenant financing. The triple net term is the one that covers this aspect. It is the loan term that will also match the length of the lease. The landlord will not be thinking of anything as the tenant will carry the responsibilities.