Tenancy in Common Simplified

Tenancy in Common (TIC) is a way for two or more individuals to have an undivided fractional ownership interest in a single piece of real property. With a #TIC, each owner has individual rights and obligations related to the property. These rights equal the proportionate share of the owner’s interest.

A TIC is a popular way for individuals with shared interests outside of property ownership to continue that relationship with their joint property ownership. It is also a great way for an individual owner to invest in a more expensive property, one they could not have afforded on their own. The idea is that a bigger, better property provides more lucrative returns.

Having an ownership interest in a TIC gives an investor the right to his or her proportionate share of net income, tax benefits and appreciation. The TIC owner is treated similarly to a fee simple owner and receives an individual property deed and title insurance for his or her share of the property. A TIC owner may bequeath his or her interest to any beneficiary upon the owner’s death.

This direct interest in real estate TIC ownership also qualifies as “like-kind” real estate for 1031 exchanges, making TICs an important part of the 1031 exchange universe. The fact that the IRS allows TICs to qualify for 1031 exchange treatment means that individual investors can now graduate to ownership of bigger (and potentially more lucrative) investments than they could afford on their own.

Of course, to shield themselves from personal liability arising from holding direct title to property, most TIC investors set up Limited Liability Companies (LLCs) for the purpose of TIC ownership.

*****

If you are looking for a different way to invest, with consistent returns and reduced responsibilities, perhaps a self-storage TIC investment is for you. Please visit out our website to learn more about these unique real estate investment opportunities.