Crucial Facts 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. This is the counterpart of a credit store. The rating that is given to each company is determined by several agencies.
In a credit rating, you will be able to see two categories. The moment that the credit rating has a BBB or Baa3 rating then your company is considered as an investment grade 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 the tenants that made the lease that are called as credit tenants and when they lease a property, referred to as a credit lease.
The moment that the owner of the building will have credit tenants, then he will be ensured that he will get the payment every time as the business continues. Once there will be credit tenants that lease your property, the building that you own will have a higher property value. If the credit tenants have a long term lease, then you can definitely get this advantage. 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. The tenets in the other hand will also have better control of the property without thinking much of the landlord. But the landlord must also know that this set up will have lower rent.
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.
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. The length of the lease is the one that will match the loan term. The landlord will not be thinking of anything as the tenant will carry the responsibilities.