What You Need To Know About Investment Grade Tenants
It is the large national companies that issue public bonds are the ones that are also given credit rating. Some have credit store and this s its counterpart. There are several agencies that determine the rating of each company.
There are basically two categories when it comes to the credit ratings. The company that you have will have an investment grade rating the moment that it will have a BBB or Baa3 rating. The moment that it will not get pass this rating then it is considered as not 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. There will be a change of the ratings over time due to the fact that then agencies that provide the ratings always checks the financial status of every company.
There are a number of big and medium size companies that are already having 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. 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. 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. 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. It should be that the exchange will not be difficult. You can go and look the investor’s guide so that you will have the needed help.
With regards to the obligations to the landlords, the institutional investors is the one that will provide the credit-tenant financing. The reason for this is because of the triple net terms. When it comes to the loan term, it will match the length of the lease. The landlord will not be thinking of anything as the tenant will carry the responsibilities.