What Is An Investment Grade Tenant
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. The rating that is given to each company is determined by several agencies.
When you are talking about credit rating, you will be able to see two kinds of 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.
An investment grade rating has already been given to a number of different big companies as well as medium-sized companies. It is the tenants that made the lease that are called as credit tenants and when they lease a property, referred to as a credit lease.
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. There is a higher property value the moment that a credit tenants lease your building. You can definitely get this especially if the lease that they have is a long term. 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. There will be better control of the property on the side of the tenant without thinking much of the landlord. The building will have a lower rent once this set up is used.
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. In completing the exchange, there will be an investor’s guide.
It is the institutional investor that will provide the credit-tenant financing and they will not often have any obligations with regards to the landlord. The coverage of this factor is under the triple net terms. The length of the lease is the one that will match the loan term. The responsibilities will be carried out by the tenant and not the landlord.
Suggested Post: this hyperlink