In a net lease, what costs are typically covered by the tenant?

In a net lease, the tenant is responsible for paying not just the base rent but also certain additional costs associated with the property. This typically includes utilities and property taxes, which are important expenses that contribute to the overall cost of leasing a commercial property. The concept behind a net lease is that the landlord transfers some of the financial burdens of property ownership to the tenant, allowing the landlord to receive a more predictable income stream.

By including utilities and taxes in addition to the base rent, the lease structure ensures that the landlord can maintain their property without incurring additional costs that may not be covered by rent alone. This is beneficial for landlords as it reduces their risk and financial exposure, while tenants in a net lease should be prepared for these additional expenses as part of their ongoing financial commitment related to the property they are leasing.