10 Minutes|In Uncategorized

Should I buy property through a Company?

Property Development is an expensive game. The start-up cost compared to other business types is high. After all, you need to buy a property in order to start, costing hundreds or millions of pounds. Even if everything goes well and your profit, you then have to worry about potentially disturbing taxes. Could buying through a company or SPV, make your life much easier? 

In this article, we’ll look at why some developers buy through company structures rather than personally. We’ll clarify what an SPV is and how it is set up and used. After that, we’ll compare two cases, a developer who chose to buy the property personally vs. a developer who bought through a company. Hopefully, by the end, you should be able to think about your own project and the route that may suit you best.

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Before we go further, we should state that we are not accountants. The article here only seeks to provide examples of what we have seen done and may help. Before venturing into property development ensure to enlist the help of experienced and proven professionals (we also do the same) which in relation to property development will likely include specialist accountants and lawyers. If you need any recommendations, please let us know. Good Luck!

Before we go further, we should state that we are not accountants. The article here only seeks to provide examples of what we have seen done and may help. Before venturing into property development ensure to enlist the help of experienced and proven professionals (we also do the same) which in relation to property development will likely include specialist accountants and lawyers. If you need any recommendations, please let us know. Good Luck!

1. The Architect (AKA The Designer)

Whether you are just starting out or are a seasoned developer, you have to consider a lot of things for a development.

The initial step is obviously to find a building or land opportunity, but how do you know what to find, and if what you did find has potential and future value?

This is where the Architect is invaluable.

The Architect through their many years of training and, hopefully, experience will have become a jack of all trades.

They should be able to initially look at your prospective site and suggest feasible options.

These could be analysed with you to achieve more specific potential projects.

With the help of other consultants (see below) they could lead until you gain plannning and then prepare detailed designs that could be costed and eventually built.

Even on site the Architect will act as the lawmaker and ensure that the project is built to the legislation and standards set until the project is handed back to you.

In essence the Architect could be seen as your most important partner who truly supports you throughout the entire lifetime of the project.

2. The Planner

Architects should know exactly what is possible to get for any given plot, right?

Wrong, unfortunately.

Generally no one can know with certainty what would be allowed on a site, and locally experienced or specialised type Architects will know a lot.

However, Architects are not trained in Planning legislation. In universities Architects spend a considerable amount of time training on design but little on conforming to Masterplans and frameworks set by national and local government.

Planners on the other hand are specialists in this and would work with an Architect consulting on the likely possibilities.

The incredible thing is nothing in Planning is ever truly a final No. There are many opportunities for appeals and redesigns but since they are costly in time and money, the ideal approach is to recruit a planner who is locally experienced with the type of project you wish to gain.

3. The Project Manager / Quantity Surveyor

Historically the Architect acted as a form of project manager and certainly Contract Administrator when a project reaches site and is getting built.

However, whilst this still holds true for home projects, for more development based projects the baton has somewhat passed to the Project Manager.

A Developer during the construction phase has a great need for understanding and experience of costs and contractual matters.

For this reason Quantity Surveyors are an important professional for the Developer. They understand deeply the sequences of different construction activities and can relatively predict costs based on moving labour supply market.

When costs change or other aspects of a project such as programme and a multitude of other matters, they can mediate or enact parts of a contract to both help the Developer and the project reach their goals.

4. Structural Engineer

Historically the Architect acted as a form of project manager and certainly Contract Administrator when a project reaches site and is getting built.

However, whilst this still holds true for home projects, for more development based projects the baton has somewhat passed to the Project Manager.

A Developer during the construction phase has a great need for understanding and experience of costs and contractual matters.

For this reason Quantity Surveyors are an important professional for the Developer. They understand deeply the sequences of different construction activities and can relatively predict costs based on moving labour supply market.

When costs change or other aspects of a project such as programme and a multitude of other matters, they can mediate or enact parts of a contract to both help the Developer and the project reach their goals.

5. Contractor

Historically the Architect acted as a form of project manager and certainly Contract Administrator when a project reaches site and is getting built.

However, whilst this still holds true for home projects, for more development based projects the baton has somewhat passed to the Project Manager.

A Developer during the construction phase has a great need for understanding and experience of costs and contractual matters.

For this reason Quantity Surveyors are an important professional for the Developer. They understand deeply the sequences of different construction activities and can relatively predict costs based on moving labour supply market.

When costs change or other aspects of a project such as programme and a multitude of other matters, they can mediate or enact parts of a contract to both help the Developer and the project reach their goals.

To Conclude...

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