(lively electronic music).- Hi everyone, my name is Paul Vojchehoske,and welcome to the Real Estate ClassroomYouTube channel.Real quick, do me a favor,give this video a thumbs up,hit that red subscribe button,and click on that little notification bell.In today's video, we're gonna discussthe different types of leases that you need to knowfor your real estate licensing exam.All right, so there's eight different typesof leases that you need to know for your exam.So let's take a look at each one of them.All right, so let's start out with the Net Lease.Now the net lease is sometimes called a Triple Net Lease,because in a net lease,the tenant is going to pay a monthly or quarterly rent,or however the rent schedule is set up.Plus, there are three other itemsthat they're gonna pay in addition to the rent.And that is gonna be, they'll be responsiblefor maintenance, property taxes,and also, the property insurance.So they're gonna pay those three itemsin addition to utilities as well.Net lease is sometimes called a Triple Net Lease,and again, you need to know that those are usedinterchangeably for the real estate licensing exam.The next one I wanna talk about is a Gross Lease.Now a gross lease is typically usedin residential settings, all right,that's the first thing.Apartments and single family homesand those type of things.And typically, with a gross leaseit's just one rent paymentat the beginning of the month and that's it.It's just monthly rent, and then the owner is responsiblefor paying things like taxes and insurance.Now under a gross lease,the tenant may or may not have to pay utilities,that's gonna depend on the specific unitthat's actually being rented out.So, we see these in residentially zoned type properties.And by the way, I forgot to mention,net leases, we typically seein commercial type settings.The next lease I want to talk about is a Percentage Lease.Now a percentage lease is what's typicallyused in retail establishments, such as mallsand things like that.And the tenant is gonna typically paya monthly rent, plus a certain percentage of gross sales.And it's important to know that it's gross and not net.That's a key point you're gonna have to know,in particular for brokers exams.I have had students saythat when taking their brokers exam,make reference to that.So it's a certain percentage of gross sales,and typically with the percentage lease,we see that in retail outlets.All right, the next lease I'm gonna talk aboutis what's called a Sandwich Lease.Now we see sandwich leases when there is a subtenant.Now I did a video where I discussed assignment of leasesand subleasing, or sometimes called subletting.If there's a subletting situation,this is when we're gonna see the sandwich leasecome into play here.And if you want more informationon that particular topic,right up here in your upper right hand corner of your screenis a little eye, click on that,and I'll provide a link to that particular video.But here's what a sandwich lease looks like.So we have the original lessor.Now remember, the lessor is the landlord, okay.Then, the landlord rents it to the lessee,which is the tenant.Now what happens, is the tenant thenturns around and leases the property to the subtenant,or the sublessee.And so what happens is, this creates a sandwich,where the lessee, the tenant, is sandwichedin the middle, all right.So that's when we would see a sandwich lease.The next lease I wanna talk aboutis a Graduated Lease.Now, with the graduated lease,you may see this in office communitiesor office parks, or office space.You could see itin certain types of commercial space as well.But it's a rent, a flat rent fee.And that is throughout,let's say it's a three year lease,or a five year lease,1what's gonna happen is through periodically1throughout that lease,1there's gonna be rent increases1on stated time periods, all right.1So, we might have a situation1where rent is 1000 bucks a month.1Then, on the one year anniversary,1it goes up to 1250.1On the second anniversary, it goes up to 1500 bucks.1It is expressed in the lease contract itself,1and it's a definite amount of rent.1It's not tied to any kind of index or anything like that,1it is just a stated amount of rent increase1in a stated period of time.1Which is a little bit different than an Index Lease.1An index lease is something that where the tenant1is gonna pay rent, plus, there will be1rent increases over the life of the lease agreement.1But it's attached to some kind of index,1such as the Consumer Price Index, CPI for example,1is one that is used quite often.1And so, just like the graduated lease,1maybe it's on the one year anniversaries,1the rents go up,1but unlike the graduated lease1where it is a stated, specific amount of money1that the increase is gonna be,1the increase is based on that index.1So if the CPI goes up 1%,1then that's gonna be what the rent increase1is gonna be on that annual anniversary, all right.1So it's a little bit different.1And then the last two, Ground Leases.1Ground leases we typically see1in recreational or campsites.1So if you have a camper1and you want to rent out a pad at a campsite,1that's what we'd see, a ground lease, all right.1And then the last one is what we call a Sale-Lease Back.1Sale-lease backs aren't that common,1but they're still something you need to know1for your real estate licensing exam.1And this is where we have the buyer1and the seller, all right.1And the buyer purchased the property from the seller1and it goes to closing.1And then immediately upon closing,1the seller, they lease back the property1for a specific period of time.1We don't really see it too much in the residential side,1other than, like, post occupancies,1where it's just a couple of days.1This is more common in the commercial side of things1where it's more long-term.1And it's a mechanism,1I won't go into details in this video,1but it is a mechanism where a seller can sell the property,1raise funds, because they need the money for1maybe a different product line, for example,1and then they turn around and lease that property back.1And the idea is, based on the product line1that they're opening up,1there's a chance that they're gonna outgrow1the current space anyways.1And so, it kinda gets them out1from underneath the property.1It allows them cash or cash flow1so they can start a new product line with the anticipation1that at some point they're gonna move the operations1to a bigger place in the future.1So that's a sale-lease back.1Okay, those are the eight types of leases1that you're gonna need to know1for your real estate licensing exam.1Real quick, if you're gonna continue to study,1check out this video, it'll be very helpful.1If you have not subscribed to this channel,1click on that little circle to my left here,1and subscribe to the channel.1That's all I got, we'll see you in the next video.
