Tenancy in Common (TIC) properties are a growing real estate investment option. They offer many benefits to investors including tax benefits, income and growth directly proportionate to your ownership percentage, professional management and low equity requirements.
TICs are formed by friends, family members and other co-owners who want to share the costs of purchasing property together but do not wish to take on the day-to-day burdens of managing it. Typical TIC arrangements provide access to all the units and facilities on a property, but they can also agree that only specific buildings or areas are available to use.
A TIC has no right of survivorship and therefore, when an owner dies, the surviving owner is not entitled to his or her share in the deed of the property. The surviving owner must work through probate to obtain control of the property.
While TICs offer several benefits, their legal status is often complicated, and owners should seek legal advice before committing to a TIC purchase. For example, rent control laws in San Francisco can make it difficult for TIC owners to occupy their new homes without violating state eviction law.
Moreover, some lenders in San Francisco have stopped offering mortgage loans on property with tenants due to tenant rights concerns. Despite these challenges, TICs are still an attractive investment opportunity for buyers who cannot afford entry-level condos but want to own a property that has the potential for condominium conversion in the future.