What Is Tenant-in-Common Homeownership?

What is tenant-in-common ownership and why has it become so popular lately? Let’s discuss.

When multiple people purchase a property together, but each only maintains a certain percentage-based portion of ownership, this is what’s known as being “tenants in common.” 

Because of the rising cost of housing and the lack of available inventory in and around Los Angeles, tenant-in-common homeownership has become increasingly common in our area lately.

Therefore, many former landlords are converting multi-unit properties into tenant-in-common properties to be sold with multiple titleholders.  This is an especially popular move in light of tight inventory on core city areas and cumbersome housing regulations, which would make condo conversion more difficult, if not impossible.

So how is ownership divided among tenants? 

Well, while this can be negotiated however the tenants see fit, most people choose to divide ownership (and the costs associated with it) equally. This means if a home was occupied by four tenants in common, each person would own 25% of the property.

Tenant-in-common ownership is popular among former landlords, sellers, and buyers alike.

Not only does this make for a more equitable living situation, it also ensures that each person carries an equal amount of responsibility for living expenses, like utilities and maintenance.

Better yet, one particular bank here has even made it possible to finance a tenants-in-common loan for as little as 10% down with an interest rate around 4.5%. 

In short, tenant-in-common ownership is popular among former landlords, sellers, and buyers alike. 

If you have any other questions or would like to learn more, feel free to give me a call or send me an email. I look forward to hearing from you soon.