Tenancy-in-common (TIC) investments involve two or more people sharing the same ownership interest in a single property. This type of investment is slowly becoming popular due to its benefits to aspiring investors.
But, how does it work? Here are a few essentials to help you understand the basic process of TIC investments.
A Breakdown of TIC Investments
Once a group of two or more individuals own a specific property as tenants in common, all of them have an equal share of the property. For this reason, all of the individuals will not be able to claim ownership of any portion of the property.
This is in complete contrast to joint tenants who typically obtain equal rights to the property stated on the same deed. There are also a few states that have joint tenancy as a default deed for married individuals, while others use tenants in common as a deed.
Understanding the Terms
As mentioned above, TIC is a kind of tenancy, while a tenant in common is a term for each co-owner who is holding an interest in a specific tenancy in common.
Each tenant in common possesses their won separate and undivided interest in the real estate property. However, although it is possible, they are not required to hold different percentages of ownership in the property.
If a Tenant in Common Passes Away
Although TIC is a great option for people looking for a more secure way to invest their money in real estate, they don’t have any right to survivorship. It means that if a tenant dies, the interest goes to their heirs through inheritance laws or by will.
Although TIC investments are a great way to manage your finances and let it grow, it’s still important to understand basic information about it. Work with a firm that can assist you with all the legal matters, including managing the taxes associated with it.