Buying a TIC in San Francisco

In a city known for sky-high home prices and a competitive real estate landscape, buyers in San Francisco are increasingly exploring alternatives to traditional condos and single-family homes. One such option is the TIC (or Tenancy-in-Common), a shared ownership structure that’s unique to cities like San Francisco. For some buyers, it can be a strategic way to get a foothold in the market. For others, it requires careful consideration.

Before diving in, here’s everything you need to know about buying a TIC in San Francisco, including how it works, what to watch for, and why working with a knowledgeable agent is essential.

A TIC, or Tenancy-in-Common, is a form of shared property ownership where two or more buyers co-own a multi-unit building together. Each owner has the right to occupy a specific unit, but legally, all owners share interest in the entire property. This differs from a condominium, where each unit is deeded separately.

TICs are especially common in San Francisco due to local housing policies, limited new construction, and restrictions around condo conversions. For buyers priced out of the traditional condo market, a TIC can offer a more affordable path to homeownership, particularly in neighborhoods like the Mission, Noe Valley, or Inner Richmond.

Financing a TIC is different from a typical mortgage. Historically, buyers had to secure group loans, meaning all co-owners were responsible for a single mortgage. However, the market has evolved. Today, fractional financing is more widely available, allowing each buyer to obtain their own loan secured only by their share of the TIC.

Still, not every lender offers TIC loans, and terms may vary. Down payments can range from 15–25%, and interest rates may be slightly higher than conventional mortgages. Buyers should work with a lender who specializes in TICs in San Francisco and understands the unique nuances involved.

• More Buying Power: TICs often cost significantly less than comparable condos or single-family homes. This allows buyers to access more desirable neighborhoods at lower price points.
  
  
• Prime Locations: Many TICs are located in charming, pre-war buildings in central neighborhoods with walkable access to shops, restaurants, and public transit.
  
  
• Strong Long-Term Value: In a market like San Francisco, where real estate tends to appreciate over time, even alternative ownership structures like TICs have shown steady gains.
  
  
• Possible Path to Condo Conversion: While not guaranteed, some TIC buildings may qualify for future condo conversion, which can increase both resale value and financing flexibility.

• Shared Responsibility: Even with fractional loans, TIC owners share responsibility for building upkeep, property taxes, insurance, and any legal or structural issues that arise.
  
  
• Decision-Making Requires Cooperation: TIC agreements often require unanimous or majority approval for major decisions, such as repairs or refinancing. Clear communication and legal documentation are key.
  
  
• Limited Lender Options: Although more lenders now offer fractional loans, the market is still smaller than for traditional properties. Buyers should prepare for a slightly longer loan process and may need to shop around.
  
  
• Restrictions on Rentals: Some TIC agreements limit or prohibit short-term rentals or subleasing. Make sure to review all occupancy and rental rules before you buy.

Before purchasing a TIC, buyers should evaluate both the physical property and the partnership agreement. Key items to review include:

• TIC Agreement: This legal document outlines each owner’s rights and responsibilities. Look for clarity on decision-making procedures, maintenance responsibilities, and dispute resolution.
  
  
• Building Condition: Since repairs are a shared responsibility, a pre-purchase inspection is critical. Review any recent upgrades, HOA reserves (if applicable), and upcoming maintenance needs.
  
  
• Co-Owner Compatibility: You don’t need to be best friends, but mutual respect and clear expectations with co-owners are essential. Ask questions and be upfront about your long-term plans.
  
  
• Legal Review: Have an attorney familiar with TIC structures review all documents before closing. This is especially important if you're buying into a smaller building with fewer units.

Not necessarily. A TIC in San Francisco can be a great option for buyers seeking affordability and location, but it’s best suited for those comfortable with collaboration and long-term planning. If you're looking for more independence or intend to rent the property out in the short term, a condo or single-family home may be a better fit.

That said, TICs have become a normalized and respected part of the San Francisco housing market. With the right support, they can offer a stable, rewarding ownership experience.

Certain neighborhoods tend to have higher concentrations of TICs due to older building stock and zoning regulations. These include:

• The Mission: Popular for its culture and food scene, this area offers a variety of charming multi-unit properties that often come with TIC options.
  
  
• Noe Valley: Family-friendly and walkable, Noe Valley is attractive to buyers looking for a quieter atmosphere with great access to transit.
  
  
• Haight-Ashbury & Cole Valley: Older Victorians in these neighborhoods are often divided into TIC units with character-rich architecture.
  
  
• Inner Sunset: Offers relative affordability and a more laid-back vibe, with plenty of TICs near Golden Gate Park and UCSF.

Buying a TIC in San Francisco involves a unique set of considerations, but it also opens the door to living in some of the city’s most sought-after areas. With the right research, legal guidance, and local expertise, it can be a smart way to own property in a competitive and ever-changing market.

If you're curious about whether a TIC is the right fit for your lifestyle and budget, don’t go it alone. The experts at Novo Real Estate have deep experience navigating San Francisco’s unique ownership structures and can help you make a confident, informed decision. Reach out today to explore current TIC listings or schedule a one-on-one consultation.