Just would like to know if it is a good idea for someone with a low budget to start real estate investing using “tenants in common” method?
Ben
Bennie Ooi
Hi Bennie,
Tenants in common is a perfectly legal way to apportion ownership on a property. The reasons for apportioning ownership are many and varied (including disproportionate income levels) and can include more than two parties.
Be aware that in the instance joint ownership the surviving partner automatically inherits the property upon the death of the other partner.
In the case of TIC this isn’t the case – when one party dies – their spouse inherits their share rather than the partner. Obviously if the TIC arrangment is for a husband and wife team then the spouse would inherit the property anyway – but if the TIC comprises unmarried people there can be ramifications later.
Derek
Not necessarily Derek.
Tenants in common means that the portion that you own will be part of your estate, and therefore can be given in your will to anybody of your choosing. If there is no will, then yes logically the spouse and/or the kids will get it.
Cheers
MelHi Mel,
Good pickup and clarification – that’s what I get when I rush something down before I go to work.
Brings to the fore the need for investors (everyone for that matter) to regularly review their wills to ensure assets are distributed according to your wishes.
Derek
Bennie,
read the latest Australian Property Investor magazine. There’s a great article on TIC and all the ramifications.
TC
Dear Derek, Mel, TC
Thsnka for the clarifications! Really appreciated that!
also, I did went through the Property Investor recent issue about tenants in common. Pretty elaborate stuff there!
Cheers,
BenBennie Ooi
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