Prioritizing STNLs for a Real Estate Portfolio

Here at Elevate Money we have a preferred property type, which is commonly known as “single-tenant, net lease”, or STNL for short. “Single-tenant”, meaning 100% of each property is leased to just one tenant, and “net lease”, because the rent received is “net” of typical real estate operating expenses such as utilities, property taxes, insurance, and maintenance. In other words, our tenants pay all of these expenses directly to the billing entity, and we as the landlord collect fixed monthly rent checks.

STNL is a simple real estate ownership model with the goal of generating long-term consistency and predictability of monthly rental income. STNL properties include businesses such as quick-service restaurants, dollar stores, drugstores, gas stations, and the like.

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An STNL property inherently relies on one tenant paying 100% of the rent owed from the building. Consequently, we here at Elevate are very diligent when purchasing a property. We scrupulously review the property’s lease and other legal documents and carefully screen competitive businesses in  the surrounding area. We want to make sure the leased premises are “mission-critical” to the tenant’s business and not easily replaceable.

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As with all real estate investments, nothing is ever guaranteed and there are risks to consider. Risks involved in STNLs include businesses deciding not to renew their leases at the end of their lease terms, and tenant bankruptcies. Careful underwriting of the tenant’s financial strength is a critical due diligence element when considering an STNL property investment. At Elevate Money, we are open and transparent with our investment decisions by sharing our property financial model which we call Elevate Lens+, or EL+ for short, for any investment we make.  

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These concepts are primary driving forces behind Elevate’s strategy to purchase STNL properties in the $1 million to $3 million range. As we continue to sell shares in our REIT offering, more STNL properties will be bought and added to the REIT’s investment portfolio. Owning many of these smaller STNL properties will facilitate diversification and risk dispersal.

As an investor in Elevate Money’s REIT, you can own a portion of this STNL-inspired portfolio and receive shares of the potential income, starting with as little as $100.