Fee simple ownership is an estate in land and it is the most common way real estate is owned in common law countries. It represents absolute ownership in the property. It is fair to say that in all probability the home that you own is fee simple ownership. Fee simple owners can also enjoy passively managed real estate investments, though through what is referred to as a Triple Net Lease. A Triple Net Lease is an arrangement in which the tenant pays rent as well as the taxes, insurance and maintenance expenses that arise from the use of the property. Frequently, a tenant is procured prior to constructing the building, a long term lease is signed and the real estate is sold to an investor, with the lease attached. The structure is most commonly used when the tenant occupies the entire building. Examples of these types of properties are Home Depot, Walgreens, CVS, McDonalds and Starbucks. Besides triple net leases, there are other varieties of passive and partially passive net leases. For example, in a Net-Net or Double Net Lease, the owner is responsible for "roof and structure", but the tenant is responsible for all other maintenance and improvements.
With triple net arrangements, the monthly lease provides a predictable, long-term income stream to the owner. Additionally, the leases typically call for increases in the rental rate over time as a hedge against inflation. Investors seeking ways to simplify their lives and reduce time spent on managing their real estate assets should consider fee simple, net leased property.