TIC or Tenancy In Common investment is the real estate investment where two or more investors own a single property. Under this taxpayer holds a deed to the property as a tenant-in-common, this type of investments are qualified under the like-kind rules of IRS Section 1031. These investments are mostly chosen by investors who are tired of maintaining their rental properties.
One of the essential benefits of Tenants In Common is that here the proprietorship can be inherited as under TIC, the investors don’t have equal proprietorship shares. TIC investment is made for projects like office buildings, apartment houses, shopping complexes, etc. TIC has one drawback when it is compared with DST that the numbers of investors under this are limited to 35, whereas DST doesn’t have any limitation regarding investors. Therefore TIC investments are almost the same as DST.
Under TIC if the owner has a small portion of the property then too, he has equal rights and benefits as a single owner of the property. Every Co-owner of the property receives a personal share after closing off his undivided percentage interest in the property. An essential point in the TIC agreement is the involvement of real estate companies. These real estate firms help investors in obtaining shares in TIC properties and play a very vital role in the closing of the exchange.
Some Benefits of TIC properties:
1.Capital AppreciationÂ
When the property is sold, TIC owners receive their pro rata share of any capital appreciation. The appreciation of the underlying real estate resource is a part of the overall return on investment.
2.TIC provides freedom to the investors
When we combine the NNN lease structures with the professionals, third-party property management makes the investor hassle free from headaches of daily management routines.
3.Excellent locations
TIC sponsors are typically longtime real estate professionals that perform extensive demographic analysis and market research on each area where properties are located. It’s in their best interest to form certain that the business leasing the property is likely to succeed in that location and that the real estate has the potential to appreciate over time. Each investor has access to the present pre-packaged due diligence information.
4.TIC provides diversification of properties
Under TIC, even if the investor has a very low investment as low as $50,000, he/she can buy more than one TIC property to diversify the exchange.
5.Depreciation
Along with other real estates, one more benefit of TIC owners is that their proportionate shares of depreciation to claim against the property income on their tax return.
6.TIC provides regular monthly income
The tenant corporation provides the lease payments to the property owners for the term of the rent. It directly gets credited to the investor’s bank account every month.
All the information provided above has been researched and thought to be knowledgeable for you.