Not everyone has unlimited investment resources. That is where fractional investment can come into play. This form of investing is where a large number of investors contribute smaller investments. These investors will purchase a percentage of the ownership of a commercial property or vacation home. Dividing the cost makes sense financially, especially if the investors are all intending to utilize the property in some way.
Not only is the cost divided amongst these investors, but maintenance and other fees are divided as well. This makes the financial commitment much more manageable for all who are interested in the property. There are two options for investors seeking this type of investment: a Tenancy-in-Common and a Delaware Statutory Trust.
What is a TIC?
A TIC, or Tenancy-in-Common, is where all of the investors can own the property, but the IRS limits the number of investors. Each owner shares the responsibility for the upkeep and various expenses associated with the home or business.
What is a DST?
A DST, or Delaware Statutory Trust, is where the investor owns a beneficial interest in the trust and not the real estate. There is no limit of owners with a DST. The DST then acts as a single entity, making it easier to obtain financing for.
If you are interested in learning more about fractional investment, contact our real estate attorney in Ponte Vedra today! Our attorneys will help you find the best course of action for the property you want.