TIC vs. Condo: What Every San Francisco Homebuyer Needs to Know (Plus the Path to Condo Conversion!) 🏡⚖️

If you're looking to buy a home in San Francisco, you've probably come across Tenancy in Common (TIC) properties alongside traditional condominiums (condos). At first glance, they might seem similar—both involve living in a multi-unit building with shared common spaces. However, the legal, financial, and ownership structures are vastly different.

For many buyers, TICs can be a smart investment and an affordable way to break into the SF real estate market, especially with the potential for condo conversion down the road. Let’s explore what makes TICs unique, how they compare to condos, and whether a TIC-to-Condo conversion could work in your favor.

🔍 What Is a TIC?

A Tenancy in Common (TIC) is a form of co-ownership where multiple individuals share ownership of an entire property without legally dividing it into separate units. Each owner has an agreement that grants them the exclusive right to occupy a specific unit within the property.

🏡 Key Features of a TIC:

• The entire building is legally one property.
• Each TIC owner co-owns a percentage of the property but does not have a separate deed for their specific unit.
• Owners share one property tax bill and one mortgage (unless fractional loans are used).
• Financing is more complex and usually involves specialized lenders.
• Reselling a TIC share can be trickier due to limited financing options.

🔍 What Is a Condo?

A condominium is a form of ownership where each unit in a building is legally a separate property. Owners hold individual deeds to their units, much like owning a single-family home.

🏡 Key Features of a Condo:

• Each unit is its own legal property with a separate Assessor Parcel Number (APN).
• Every owner has a separate mortgage and tax bill.
• Financing is more accessible through traditional lenders.
• Condos have HOAs (Homeowners Associations) that maintain common areas and enforce rules.
• Resale is generally easier, as condos are more widely recognized in the real estate market.

🏗️ TIC-to-Condo Conversion: A Game Changer for Owners

One of the biggest advantages of buying a TIC in San Francisco is the possibility of converting it into a condo. This process legally separates the units, allowing each owner to hold an individual deed and significantly increasing property value.

✅ Why Convert a TIC to a Condo?

• Increased Property Value – Condos generally sell for 15-25% more than TICs.
• Easier Resale – More buyers and traditional financing options available.
• Individual Financing – Each owner can secure their own mortgage, eliminating shared financial risk.
• Simplified Ownership – You’ll own your unit outright with no complex co-ownership agreements.

🔎 The SF Condo Conversion Process

San Francisco has strict condo conversion rules, but here’s how it works:

• 2-Unit TICs: Can convert more easily if all owners have lived in the property for at least one year. 🏡
• Buildings with 3+ Units: Must enter the Condo Conversion Lottery, which has strict eligibility requirements and can take years. ⏳
• Ellis Act & Eviction Restrictions: If previous tenants were evicted under the Ellis Act, the property may be ineligible for conversion. 🚫

While not all TICs can convert, those that do can be a huge win for owners looking to build long-term equity in San Francisco.

💰 TIC vs. Condo: Which One Is the Better Deal?

While condos offer independent ownership and easier financing, TICs can be a more affordable entry point into the SF market—often priced 10-30% lower than comparable condos.

🔹 When a TIC is a Smart Choice:

✔️ You’re a first-time homebuyer looking for a lower purchase price in a prime SF neighborhood.
✔️ You plan to convert to a condo down the road, adding value to your investment.
✔️ You’re comfortable with co-ownership and a shared financial structure.
✔️ You’re securing a fractional loan (rather than a group loan) to limit financial risk.

Bottom line: If you want an affordable way to buy in SF and have patience for potential condo conversion, a TIC can be a fantastic investment! 🚀

📌 Need Expert Advice? Let’s Talk!

Navigating San Francisco’s real estate market can be overwhelming, but you don’t have to do it alone. As a licensed REALTOR® and TIC specialist, I’ll help you:

✅ Find the best TIC or condo for your needs
✅ Navigate financing options
✅ Understand the condo conversion process
✅ Make a smart long-term investment

📲 Call or text me at 415-602-8912 or email steve.williams@compass.com to start your home search today!