1031 Tic Exchange

TIC stands for Tenant in Common and refers to property ownership in which multiple parties have joint ownership of a property. There are many advantages to entering into a Tenant in Common property ownership, which can provide more profits for you than if you owned a property by yourself.

Combining Tenant in Common ventures with 1031 Exchanges can allow you to build wealth with real estate investments far beyond what you could do without such tools. Saving with 1031 TIC Exchanges benefits is easy.

Using partners to invest in property allows you to afford larger properties, such as institutional grade investments. These properties can go up in value faster and with more consistency than other types of properties, which makes your investment safer and provides a faster profit.

Instead of buying a single larger property you and your partners can also invest in several smaller properties and have a more diverse range of real estate investments. More diversity in investments gives you better investment security.

Even with a Tenant in Common arrangement you can still use 1031 Exchanges. These IRS 1031 Exchanges allow you to sell a property and not have to pay capital gains taxes on the profit made on the investment. However, the catch is that all of the funds generated from the sale of the property must be reinvested into a new property investment.

This allows you and your partners to continue to invest in bigger and better opportunities without being hit with capital gains taxes each time you move your invested funds from one property to another.

Tenant in Common partnerships also give you substantial write-offs and tax breaks which allow you to use your savings for even greater investments or just as extra money in your daily life. The money a 1031 Exchange saves you on capital gains taxes also allows you to have even more money to reinvest in a replacement property.

1031 Exchanges can be confusing and time consuming, and that is even more so with a Tenant in Common arrangement, but the money you have on capital gains taxes are worth it especially if your property investment has generated a lot of additional value.

There are some downsides to Tenant in Common arrangements, including the fact that you have to deal with partners rather than getting total control of the ownership yourself. However, these downsides are made up for and then some by the benefits. You can draw on the experience and knowledge of your partners and you each can cover the business shortcomings of the others.

This allows your collective partnership to be overall more experienced and business-smart than any one person could be alone. You also get to share the work and responsibilities which means you have more free time.

A Tenant in Common arrangement might not be for everyone, but the advantages it offers means everyone should give it honest consideration.

1031 Tax |