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TICs - Why All the Fuss?

John Krol

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There is no denying that the popularity of TICs has increased exponentially in recent times. It's amazing to see a concept which was alien not too long ago, now being adopted by most savvy investors.

Before we jump into why TICs are the new ‘in’ thing, it is prudent to first go over a very basic introduction of what TICs are for those who as yet have not heard of this concept. The word TIC is an acronym for Tenancy (Tenants) In Common. What TICs, ‘cotenancy’ and ‘fractional ownership', basically do is to allow an investor to maintain the rights of a single owner of a property even though the property actually has multiple owners. How this is possible is another discussion altogether and hence will not be covered here. In short, just know that TICs allow a single investor to benefit from all the advantages and securities associated with single ownership of a large commercial property with considerably fewer risks and hurdles. To gain a complete understanding of the nitty-gritty of a TIC's workings, you can go over the other articles provided by us.

In the meantime, allow this article to instead focus on why more and more investors are opting for a TIC when making a real estate investment. In other words, let this article be a guide for you that provides you with the benefits of going into an investment through a TIC arrangement.

Like almost all other inventions, the advent of TICs has been driven by the need for such an arrangement. Given that you're taking the time to read this article, you must obviously have some sort of interest in real estate and will know that the prices of real estate have risen quite considerably over the past few years. Moreover, you must also be aware that communities in general have begun to adopt stricter and stricter restrictions on growth and condominium conversions. Hence, it is only natural that people will turn to an alternative which shall provide them with more ease of doing business as well as higher profits.

What is this alternative? Yes, it is none other than Tenancy in Common. So what benefits does a TIC offer that makes it better than more traditional investing options in today's volatile economical state. Firstly, TICs allow investors to lower the prices they have to face as buyers are able to combine their resources. Similarly, TICs increase the choice of investments options for a buyer as he/she is now able to opt for options which would have been too expensive or out-of-reach otherwise. Additionally, TICs further allow investors to reduce their work burdens by allowing them to restrict their responsibilities to an amount they can proficiently handle.

Needless to say, TICs are a blessing for all investors. However, it is important for you to note that it's just not the buyers who benefit from TICs; sellers too are at a great advantage when they opt for this ingenious arrangement. TICs allow sellers to increase their sales prices and marketing options by giving them the chance to sell fractions of their property to multiple buyers at rates that usually add up to more than what a single buyer would pay if he/she bought the whole property in one-go.

Additionally, TICs have also gained in popularity thanks to the new option of ‘fractional loans’. These recently introduced fractional loans allow co-owners to maintain individual mortgages, hence greatly decreasing, if not totally nullifying, the risks associated with co-ownership.

Thus, it is pretty easy to see that TICs are truly the future when it comes to real estate investing. TICs are able to offer the average investor options which he/she can and would not get elsewhere. Advantages such as a stable and secure monthly income along with a strong potential for growth, definitely make TICs a very viable arrangement. In the rapidly changing world of today, and given the current state of the economy, it's no wonder that TIC's have gained so much popularity. If you haven't yet jumped on the bandwagon yet, it is high time you do right away before you get left behind.

John Krol
The Investor's Guide to Commercial Real Estate and Retirement Planning
How to Invest In Commercial Real Estate Using Your IRA or 401(k). . . Maximize Your Profit. . . and Save For Retirement & Cash Flow Now


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