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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. Some have credit store and this s its counterpart. You will be able to see a number of different agencies that provides the credit rating of the corporation.

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. It is by not reaching the former rating that the credit rating that you will get with your company is a non-investment grade. It is when you will get an investment grade rating that the credit that you have had a very low chance of it not getting 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. 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.

As the businesses continues if the credit tenants, the owner if the building, on the other hand, will enjoy being paid every month for the rent of his building and that is a sure fact. 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. Before the bank lends you money, they will first check the credit score that you have especially for your investment property. 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 reason for this is because of 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.

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