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10 Benefits of Tenants-In-Common
1. You free yourself from day-to-day management responsibilities. With no more property to manage, you have more leisure time to relax or pursue other interests. In addition, because someone else is managing the property for you, there are no geographical limitations. You are free to invest in real estate markets nationwide. 2. You can trust the professional people who are managing the property on your behalf. Buildings owned by tenants-in-common interests are professionally managed by national real estate companies who have strong audited track records and extensive experience in all sectors, types, and locations of real estate. In addition, because these are the same companies that acquire the properties and arrange the tenants-in-common programs for them, they have a vested interest in the performance of the properties. You can relax and trust them to maintain the buildings, do the leasing, collect rent, service the mortgage, and handle all of the other management responsibilities you would like to be free from. 3. You may very likely enjoy increased monthly cash flow. Your investment in a tenants-in-common interest provides you with a check every month. The cash flow that owners typically receive generally starts at 7-8% per annum. Because exchangers take on a new depreciation schedule, however, cash distributions are typically 50- 100% tax sheltered, depending upon asset class and leverage. Factor in appreciation and principal reduction, and total annual projected returns generally range from 14%-18%. 4. You don't have to do the legwork to find the building that you want to buy. A highly qualified, national real estate company will locate the building for you, provide all due diligence, arrange for the financing, and do all the other work necessary to acquire the new investment property and set up the tenants-in-common program. A wide range of tenants-in-common properties exist for sale, in many different asset classes and geographical locations, so (with the help of Concorde Exchange Group) you will be able to easily identify possible properties within the requisite 45 days, acquire within 180 days, and even have a "back-up" in case your preferred purchase becomes unavailable for some reason. 5. You are able to invest in larger, safer, higher-quality institutional properties than were you to invest as an individual. You end up with a larger, higher-quality building that tends to attract tenants with greater financial strength and stability. 6. You benefit from multiple tax advantages. You not only can defer capital gains taxes until death, at which point they are forgiven, you also can gain additional tax advantages through a new depreciation schedule and in doing so typically shelter 50-100% of your cash flow. 7. You gain non-recourse debt. Accredited investors assume institutional grade, pre-arranged, non-recourse (no personal guarantee) financing with easy approval. You can invest in properties that have no debt, or in ones with up to 75% leverage. 8. You can start with as little as $100,000. tenants-in-common has a much lower minimum investment than does sole ownership and therefore is more flexible. Variable investment sizes can start as low as $100,000 and can be structured to match an owner's equity and debt requirements. 9. You have a first-class way to diversify your assets. Large net proceeds may be split among several properties, and so invested in several different markets and asset classes. 10. You preserve your capital by investing in properties that continue to appreciate. Profits can be locked in by selling out of highly appreciated markets and then re-investing 100% of the net proceeds from those sales into growth markets. If you have a specific 1031 benefit question you would like to have answered, click here to email us. |
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