When looking for suitable real estate investments for multiple partners, it is becoming more and more popular to invest in Tenancy in Common (TIC) situations. With a TIC, you are provided larger possibilities of investment structures, personal tax breaks from the IRS, and a lower investment cost than might otherwise be possible.

A Tenancy in Common allows a group of owners to share in undivided property. Each owner can own equal portions of the property, or unequal portions. This is determined by how much each person wants, or is able, to invest at the time the TIC is formed.

TICs have proven popular in some localities, such as San Francisco, where multiple partners buy a small apartment building that the partners intend to occupy.

This article will present some of the benefits and risks involved with TIC's.

There are a number of benefits available to an investor in TIC's. Here are a few of them.

It only makes sense that when you team up with other investors that the purchasing power is greatly increased. The IRS declares (in Revenue Procedure 2002-22) that a TIC may have up to 35 owners involved in one property. This combined investment money allows you to go from the smaller real estate properties as a single investor up to the large shopping centers, office complexes, warehouses, and high rise buildings. In addition, you can purchase some industrial buildings and Assisted Living facilities.

TLC's offer you the possibility of a monthly cash flow from the property. While this may partly depend on the property, each property in a TIC investment program can be selected based on its quality and potential with high-grade tenants.

This is one of the best benefits of investing in TIC's. You can invest in quality real estate, make a profit, and yet not have to share in the management problems of it. These buildings can be professionally managed for you and the other investors. This feature enables you to invest in more than one property and still have time on your hands - and stay worry free.

With TIC's, you have the opportunity to invest in multiple properties. This allows you to

diversify your portfolio by investing in different kinds of property, which may provide you with a more stable income from your investments.

Since the properties that are available for TIC investing are screened for their profitability, this allows you to invest in properties that are most likely going to increase in value. Since your standard TIC investment is on a 5 to 10 year basis, this gives you a stable time reference to determine what is going to happen, and yet is also short enough to sell it if adverse circumstances occur - if you should ever need to.

A Tenancy in Common interest is fully owned by you. This means that it is made part of your estate upon death, and can be designated by a will or estate planning to be passed to a specific loved one.

A few of the risks that are involved with TIC's are as follows:

As is true with any real estate, the property can unexpectedly lose value instead of achieving the desired increase. Investing in more than one building, though, may help to offset this potential problem.

Tenants may come and go with any real estate. While finding replacement tenants, the income will fluctuate and may even become non-existent until new tenants are found.

Any money that is tied up in real estate means that it may not be easily accessible for some time. Although you can sell your portion of the TIC, buyers will also look at the reasons you want to sell before they buy.

Mortgage lenders may not provide mortgage financing for obtaining a TIC interest, or charge higher interest rates than what would otherwise be available for outright purchases of condos, houses or other properties.