Advantages of TIC
Tenancies in Common have gained popularity in San Francisco for two main reasons. First, San Francisco is land-locked which curtails new home growth and housing development. Second, housing regulation –specifically condo conversion restrictions- limits the supply of individually owned single unit housing. As such tenancy in common has become more advantageous. Some benefits of TIC include:
Maximization of Buying Power: Buyers are able to pool their resources with other buyers and access much more real estate collectively than they could individually. This gives buyers a greater selection of homes from which to choose as they aren’t limited by only single family homes or condos.
Higher Sale Prices: Sellers benefit because more shoppers drives up demand which in turn drives up price.
Quicker Sale: Having more buyers on the market increases the likelihood of sale and reduces the sellers “hold” risk. The seller has a greater spectrum of people to whom they can market their property.
Fractional Loans: Because TIC’s have become so common, mortgage lenders have responded by introducing fractional loans. These are loans that allow co-owners in a TIC to have individual mortgages under the umbrella of one TIC, thereby reducing the co-ownership risk of a TIC.