A net lease is a lease structure in which the tenant, rather than the landlord, is responsible for paying some or all of a property's operating expenses in addition to base rent, commonly including property taxes, insurance, and maintenance. Net leases are typically classified by degree: a single net lease has the tenant covering property taxes, a double net lease adds insurance, and a triple net lease shifts taxes, insurance, and maintenance responsibilities to the tenant, leaving the landlord with a largely passive income stream. Triple net leases are especially common with single-tenant retail properties occupied by national credit tenants, such as pharmacies, quick-service restaurants, and dollar stores, where long lease terms and predictable rent escalations appeal to income-focused investors. Because tenants absorb most variable operating costs under a net lease, landlord returns tend to be more stable and easier to underwrite, though overall yields are often lower than for properties requiring active management. Lease structure, tenant credit quality, and remaining term all factor heavily into how net lease properties are valued and priced.
Further reading: Real Estate Investment Strategies for Accredited Investors in 2026
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