Case Study: My Experience With Tenants

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. You will be able to see a number of different agencies that provides the credit rating of the corporation.

In a credit rating, you will be able to see two categories. 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. 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. 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.

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.

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. There is a higher property value the moment that a credit tenants lease your building. It is this advantage that you will get the moment that your credit tenants will have a long-term lease on your property. 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. The tenets in the other hand will also have better control of the property without thinking much of the landlord. 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. Before the bank lends you money, they will first check the credit score that you have especially for your investment property. 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 the institutional investor that will provide the credit-tenant financing and they will not often have any obligations with regards to the landlord. The triple net term is the one that covers this aspect. It is the loan term that will also match the length of the lease. The landlord will not be thinking of anything as the tenant will carry the responsibilities.