Tenants in What?! TIC's - The Most Underrated Way to Own Property

Shedding light on Tenants in Common (TICs)

So you and your friend want to buy a home together. Amazing! Now what?

In the evolving landscape of homeownership, Tenants in Common (TIC) stands out as an often misunderstood yet highly advantageous option for shared ownership. Despite its potential to revolutionize property (co)ownership, many harbor misconceptions about what TIC truly entails. Let's debunk some common myths and shed light on why Tenancy in Common might just be the perfect fit for aspiring homeowners.

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What is Tenancy in Common?

Tenancy in Common is a form of property (co)ownership where two or more individuals hold title to a property together, with each owning an undivided interest. Unlike Joint Tenancy, TIC allows for different ownership percentages and does not include the right of survivorship, meaning an owner’s share can be passed down to heirs or sold independently.

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Common Misconceptions About Tenancy in Common

Misconception 1: TIC is too complicated and risky.

Reality: While it involves legal considerations, TIC agreements can be meticulously crafted to address potential risks. Clear agreements and proper legal advice can mitigate complications, making TIC a straightforward option for (co)ownership.

Misconception 2: TIC owners must share all decisions equally.

Reality: TIC allows for flexibility in decision-making. Ownership shares can be unequal, and decisions can be made proportionally based on ownership interest, ensuring fair and efficient management.

Misconception 3: Financing a TIC property is nearly impossible.

Reality: While traditional mortgage lenders may be less familiar with TIC, specialized lenders and TIC-friendly financial institutions offer mortgage solutions tailored to TIC arrangements, making financing accessible.

Misconception 4: Selling a TIC interest is difficult and restrictive.

Reality: TIC owners have the right to sell their share independently. With a robust TIC agreement in place, selling an interest can be as straightforward as selling any other property interest, provided the terms are clearly outlined.

Misconception 5: TIC only works for family members or close friends.

Reality: While TIC is popular among families and friends, it is equally suitable for unrelated individuals seeking shared ownership. It offers a viable solution for diverse groups looking to enter the housing market together.

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Benefits of Tenancy in Common

1. Accessibility: TIC lowers the barrier to homeownership, allowing multiple parties to pool resources and purchase property collectively, making high-value real estate more accessible.
2. Flexibility: Owners can determine their ownership percentage, accommodating varying financial contributions and circumstances. This flexibility extends to decision-making and property management, tailored to the group's preferences.
3. Investment Potential: TIC offers a unique investment opportunity. Owners can benefit from property appreciation and rental income, diversifying their investment portfolio with real estate.
4. Estate Planning: TIC provides a seamless way to manage estate planning. Owners can pass their share to heirs without complications associated with joint tenancy's right of survivorship.

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Conclusion

Tenancy in Common is an under-appreciated construct in the universe of alternative homeownership. By understanding and dispelling common misconceptions, potential homeowners can unlock the benefits of TICs, making it a practical and rewarding choice for (co)owning property with others. Whether you're family, friends, or simply like-minded individuals, TICs provides the structure and flexibility needed to achieve your homeownership dreams collectively.

Want to learn more about how tenants in common could help you realize your homeownership dreams? Schedule a call with us today.