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Benefits Of A Tenancy In Common

One of the advantage of Tenancy In Common ownership of investment property is that the individual investors each maintain the ability to have a say in the day-to-day operation of the property, including when and under what terms to eventually sell the investment. Contrast this to Delaware Statutory Trust ownership where individual investors cede this authority to a third-party. Also, since buyers are able to pool their resources in a TIC, this gives the TIC collective much more buying power than an individual investor may have. This opens up a wider selection of potential investment properties, with greater growth potential. Finally, in cases where the TIC is offered as a […]

What Is Tenancy In Common?

Tenancy In Common (TIC) is a way for two or more individuals to have an undivided fractional ownership interest in a single property. With a TIC, each owner has individual rights and obligations related to the property. These rights equal the proportionate share of the owner’s interest. Having an ownership interest in a TIC gives an investor the right to his or her proportionate share of net income, tax benefits and appreciation. The TIC owner is treated similarly to a fee simple owner and receives an individual property deed and title insurance for his or her share of the property. A TIC owner may bequeath his or her interest to […]

Risks Of A Delaware Statutory Trust

A DST offers an investor many benefits not found in other shared-ownership types of real estate investments. However, DSTs do not come without some risk – just like any other investment. One of the biggest risks to consider is the reliance on a program sponsor to manage the investment. Unlike a Tenancy-In-Common (TIC) where individual investors have a direct say, investors in a DST relinquish the day-to-day decision making authority to the program sponsor. This means that should the program sponsor make unwise decisions or become insolvent, the DST could fail without any meaningful input from the individual investors. Also, as with any investment, there are tax-related risks associated with […]

Benefits of a Delaware Statutory Trust

One of the main reasons investors are so interested in purchasing an interest in a DST is the benefit of owning securitized real estate. However, a DST provides other benefits to investors, as well. Eliminates Unanimous Approval Requirement Unlike a Tenancy-In-Common (TIC) ownership structure, a DST does not require the unanimous approval of all the investors to make decisions related to the held real estate. For example, should the economic environment require the quick sale of a parcel of real estate held by the DST, the decision-making authority to list or sell the property lies with the signatory trustee of the DST rather than the investors themselves. Limited Personal Liability […]

What Is A Delaware Statutory Trust?

A Delaware Statutory Trust (commonly referred to as a DST) is, as the name suggests, a legal entity created as a trust under Delaware state law. A DST is created for real estate investment purposes, and is especially useful in a 1031 exchange. Under a DST, investors each own a pro rata share of the DST itself. The DST in turn holds title to various real estate interests, and distributes any income received from the properties (either through rental income or the sale of the property) to the investors in proportion to their ownership share in the DST. The DST, via its signatory trustee, makes all decisions related to any […]