Defer the taxes by investing 1031 TIC property

by Sadie J. Blogger

TIC (Tenants in common) is a co-ownership agreement under which many investors pool their funds and agree to hold one joint property. Every investor enjoys an undivided, fractional interest in an entire property, and they participate in a proportionate portion of the net income, tax shelters, and growth.

Every investor receives a separate property deed and title insurance for their fractional interest in the property and has all the same rights and privileges as a single owner. In a TIC arrangement, co-owners have the right to isolate or transfer their ownership interest in the property without obtaining consent from the other co-owners. This is one of the distinguishing features that sets TICs apart from other arrangements.

A TIC 1031 Exchange Advisor provides knowledge about diversification among several properties at various geographic locations. Someone can invest in a warehouse, hospital, a high-end hotel, storage unit facility, an office complex, or an apartment building valued in the millions. This diversification may improve the value of a person’s investment portfolio.

Benefits of purchasing a TIC property:

Easy and Quick

TICs offer an ‘Inventory’-like nature, and buying is easy and quick. Because of this reason, TICs make an excellent backup replacement property identification in case other options fall through after your 45-day deadline has crossed.

Predictable monthly cash flow

The investment in tenants-in-common interest provides the investor with monthly rent directly credited into their bank account every month. The tenant company guarantees you rent payment; therefore, there are companies like Walgreens that guarantees the rent payment for the duration of the lease.

Freedom from everyday management responsibilities

TIC provides the investor leisure time to relax or seek after different interests because of the nature of properties and expert management that's in place. Investors can relocate and live far away from where the building is located.

Access to Investment-Grade Commercial Properties

TIC provides the opportunity for many exchangors to invest in larger, increasingly steady, more excellent institutional properties with stronger tenants than they would have the option to as a person.

Availability for Non-Accredited Investors

Unlike DSTs, TIC properties are also available to those investors who do not meet the net value or income standards of an “Accredited Investor.”

Advantages from multiple tax advantages

Investors not only defer the capital gains taxes on the sale of the property, but they also defer tax upon death; at this point, they are excused. The income that owners typically receive generally starts at 5-7% per annum, and much of that monthly income can be shielded from taxes through depreciation.