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. Some have credit store and this s its counterpart. There are several agencies that determine the rating of each company.
In a credit rating, you will be able to see two categories. The company that you have will have an investment grade rating the moment that it will have a BBB or Baa3 rating. You will probably get a non-investment grade the moment that the rating will not reach the former. The credit that you have once you will get an investment grade rating is that it has a lower chance for it not to get paid. The financial status of every company is being checked once in a while by the agencies that provide the ratings that is why the ratings will change over time as well.
For the large companies and medium-sized companies, there are already a large number of them that already got an investment grade rating. It is referred to as credit lease the moment that the company will lease a property and the tenants that made that lease possible is known as the 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. 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. Without thinking much of the landlord, the tenant will have better control on the property. The moment that this setup is used, the rent will be much lower.
It is when you are a building owner that you should make sure that you will consider the credit strength of your tenant. When it comes it your investment property, the bank will make sure that they will check your credit score before they will proceed in lending you money. You have to make sure that this exchange will not be difficult. You can go and look the investor’s guide so that you will have the needed help.
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. When it comes to the loan term, it will match the length of the lease. The responsibilities will be carried out by the tenant and not the landlord.
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