About Tenant-In-Common Properties
A tenant-in-common (often referred to as a TIC) investment occurs when an individual investor purchases a fractional interest in a professionally-managed commercial real estate property. In simpler terms, you can buy a “share” of a property. It can be a retail strip center, an office building, land or large apartment community.
TIC investments are ideal for investors who want to own real estate without being a landlord. A TIC investor receives monthly checks, just like rent, based on the performance of the particular property.
The level of investment varies according to property, but an investor should expect to invest between $100,000 and $1,000,000. There can be up to 35 “shares” available but typically, you would see somewhere between 12 and 20 investors co-owning the property.
Want to learn more? See the benefits of investing in TICs.
Benefits of a TIC investment
- Passive Real Estate Ownership
This is not a day-to-day type of property ownership. Thus, you’re not acting as a landlord or repairman or rent collector. Those activities are already in place by a reputable, often nationally-recognized property management company. - In-depth due diligence
When it comes time to buy into a TIC property, all the due diligence has already been done. Much like a prospectus for a mutual fund or retirement account, investors are given extensive information about the property’s history, location, physical characteristics, financial performance, demographics and regional/MSA data. - Seamless integration of real estate into investment portfolio
Many, many investing experts recommend diversifying your investment strategy with real estate. Now, it’s been made much simpler. - 1031 Exchange current property into a TIC
TICs are commonly used as exchange properties because it allows an investor to exchange sale proceeds, tax free, into larger, institutional grade properties with pre-arranged financing. Thus, it makes it much simpler than going through an actual “purchase” process. - Appreciation and Cash Flow
If you purchase an income producing property, you will generally receive your percentage quarterly. Additionally, you benefit from the property's potential appreciation as well, just like any other form of real estate ownership.
Property types
A wide array of properties can be converted to Tenant-in-Common investments. Here are some examples:
- Class A apartment property
High-end, amenity rich apartment homes in prime metropolitan regions across the country - Value-added multi-family
Apartment properties considered low end Class B or Class C that have potential to perform at much higher levels with improvements and a new management structure - Triple Net Lease Properties
Triple Net, or NNN, are professionally managed commercial properties where the tenants pay Taxes, Maintenance, Insurance and Utilities in addition to their rent. This is a low-hassle structure for the property owner and popular in attractive, grocery store-anchored retail and regional centers, large, Class A office buildings and professional parks and national credit single tenant buildings. - Light Industrial and Manufacturing Facilities
These are usually flex centers and warehouse properties. A flex property is one that combines office space with light warehouse usage.