Advantages of TIC Tenants-in-common Investing

The Four Yields of TIC Investing

1. CASH
2. Tax Shelter
3. Equity Build-up
4. Appreciation

The cash yield - This is the money left over after vacancies, operating expenses, and mortgage payments, but before taxes.  Often TIC investments yield more predictable cash flows than traditional real estate.  This cash flow is mostly tax sheltered. 

The tax shelter yield - Even though the properties are most likely increasing in value, the IRS allows you to depreciate the purchase price of the asset over time.  This "cost recovery" allowance can be combined with the interest paid on the mortgage deduction to provide a tax shelter.  In a well leverage, properly structured TIC investment, it is entirely possible to shelter not only the income derived from the investment, but also to have excess tax shelter that can be applied against income derived from other investments.  

The equity build-up yield - This is simply the increase in equity ownership gaines by the down payment and paydown of the mortgage.

The appreciation yield - Inflation, demand, increased rents all add to the appreciation of a property.  TICs have propfessional managemnt that also adds value to a property.  When it is time to sell the asset, the TIC owners gain in the appreciation proportionate to their investment.

As you can see, TIC investments have all of the benefits of traditional real estate, with the added benefits of hands-off professional management.  The insurance, financing, and due diligence is all done for you, and you have a deeded interest in a property giving you the rights to sell,exchange, transfer, or sell when you wish. 

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