by felipedebedout1 
Key Differences Every San Francisco Buyer Should Know What’s the Difference Between TICs and Condos? A Buyer’s Guide
When buying property in San Francisco, two common types of ownership are TICs (Tenancy in Common) and condos. While they might seem similar, they have key differences that could impact your decision as a buyer. Here’s a breakdown of both:
TIC (Tenancy in Common)
A TIC is a shared form of ownership where multiple people co-own a building but each has an agreement on the specific unit they occupy.
Pros of TICs:
- Affordability: TICs are typically more affordable than condos. They allow buyers to enter desirable markets like San Francisco at a lower price point.
- Flexibility in Terms: TICs often offer more flexible ownership structures, including fractional financing for each owner.
- Great for Transitioning: Many buyers use TICs as transitional properties. They often come with adjustable-rate mortgages (ARMs), which offer a low-interest rate for the first 5–7 years. This makes TICs ideal for buyers who plan to sell or move within that time frame, taking advantage of the lower rates before moving to their next property.
Cons of TICs:
- Financing Challenges: Securing a mortgage for a TIC can be more difficult, and the interest rates are often higher compared to condos.
- Shared Responsibility: Unlike condos, where owners only pay for their unit’s share of maintenance costs, TIC owners share responsibility for the entire building. This can complicate decisions regarding repairs and improvements.
- Complex Exit Strategy: Selling a TIC can be more complicated than selling a condo, and the market for TIC buyers may be smaller.
Condos (Condominiums)
A condo gives individual ownership of a specific unit in a building, while the shared areas are jointly owned by all the condo owners.
Pros of Condos:
- Easier Financing: Condos generally have easier access to traditional mortgages with lower interest rates.
- Individual Ownership: You own your specific unit, making it easier to buy, sell, or refinance without needing agreement from other owners.
- HOA Management: Condos often have a Homeowners Association (HOA) that manages building maintenance and common areas, reducing your individual responsibility.
Cons of Condos:
- HOA Fees: These fees can be high and cover building maintenance and amenities. Owners have limited control over how the fees are spent.
- Market Prices: Condos in popular areas like San Francisco can be pricey, especially when compared to TICs.
- Regulations: Condo owners may be subject to strict HOA rules regarding renovations, noise, or property use.
Which is Right for You?
If you’re looking for a lower price point and don’t mind a more complex ownership structure, a TIC could be a good option. The financing flexibility of TICs, particularly with ARMs, makes them appealing for buyers seeking a transitional property. On the other hand, if you prefer ease of financing and more independence in your ownership, a condo might be the better choice.
