Owning property through an LLC makes sense￼
The best way to make fractional ownership a success is by creating an LLC, buying the property through it, and dividing the property into shares or fractions for shareholders to own. But how exactly is it done and what are the main benefits?
Keep reading to know more about fractional ownership of a home through an LLC. Co-Owning a home will stop being an abstract concept in your mind and become more of an actual possibility to own better, diversify costs and risks, and make a smart investment.
What is an LLC?
An LLC is a business entity. When applied to real estate it is important to know that it is separate from its members. Among its many benefits are protection against liability, flexibility, privacy and simplicity. Although some work is involved, It is also easy to create and manage.
Other forms of buying and selling property through an entity include corporations, and partnerships, however, the latest does not protect from liability from other owners, and creating a corporation means entering a complex world that can be never ending as far as paperwork is involved.
How is a real estate LLC established?
Typically a real estate company that specializes in fractional ownership or co-ownership will create an LLC for a specific group of buyers and buy the house through it. Each owner owns a share of this company, which also means they own the house through the LLC. The fact the home is bought through an LLC makes it each to buy, exchange or resell the shares. It is quick, easy, and transparent.
Vivla has partnered with Garrigues, one of the most important law firms in Spain, to make sure the establishment of its LLCs is done in a transparent way, with all legal guarantees. That way owners can have the assurance they not only invest in a smart and practical way, but through the best possible entities.
Benefits of owning property through an LLC
- It reduces liability:
Liability is one of the main benefits when buying property through an LLC. It provides protection for the investor’s assets, because it is the entity that is liable for any damage or issues with the property, instead of individual owners.
When you deal with multiple owners, issues can arise depending on the use each person makes of the property. That includes stains, damaged items or other common misshapes.
- Tax benefits: in many cases, buying property through an LLC can result in a big difference on the amount of tax you pay when you sell it. VAT can be considered a deductible company expense, something which can´t be argued in the case of a physical person owning the property.
- Privacy: it is an important aspect when you buy a home through an LLC. When the listing of your home goes public in case you want to resell or for any other administrative matter, it will reflect information about the company and not the owners.
- Simplicity: when you want to get rid of your shares, the process is quite simple. Paperwork is streamlined and there is no need to create a new deed.
How Vivla’s LLC works
Vivla’s main mission is to make owning a second home easy and enjoyable. For that purpose, and through the support and thorough advice from the best experts in the sector, we believe that establishing an LLC and dividing the property into shares you can buy makes the experience seamless, flexible and really easy. This is what the Vivla process is like:
- Vivla establishes an LLC for each home, diversifying risks and optimizing the acquisition process for each of the owners.
- We take care of all the paperwork so you don’t have to. You can enjoy total peace of mind, because we have partnered with top-of-market experts in all legal, finance and real estate aspects of the purchase process.
- Vivla’s lean ownership model means you don’t have to deal with the typical complications of full ownership.
- Buying property through one of our LLCs means you own ownership interest. This means you hold rights on the investment: you can use it and are entitled to a share of the property profit or value. The amount of use and profit share proportional to the amount of shares you own.
- Each property is divided into 8 shares, and you can buy more than one share through the LLC.
- Because of its LLC structure, transferring ownership interest at Vivla is an easy and streamlined process.