TIC, or Tenancy in Common, is a form of co-ownership of the property where multiple investors own a share of a property. Rental income from the property is distributed among TIC investors based on their ownership percentage.
For example, if there are four TIC investors who each own a 25% share of a rental property, the rental income would be divided equally among them. If one investor owned a 50% share and the other three owned a 16.67% share each, the investor with the larger share would receive half of the rental income, and the other three investors would each receive one-sixth.
It’s important to note that TIC investors may also have agreed upon different distribution arrangements, such as a preferred return or a waterfall distribution, which could impact how rental income is distributed among them. These agreements should be outlined in the TIC agreement or operating agreement, and investors should review these carefully before investing in a TIC property.