Create a company to buy and sell real estate: costs and obligations

If you are considering professionalizing your activity of buying, renovating and selling or renting real estate, creating a company can give you access to better financing, separate risks, and optimize taxation.

At Borneo Advisors we help investors choose the appropriate corporate vehicle, calculate the real budget, and implement processes so that the operation is sustainable and scalable.

Which type of company suits you according to your strategy

There is no “magic” legal form for all cases. Choosing well depends on your model (hold vs. flip), horizon, investment ticket, partners, and bankability. The decision affects taxes, liability, governance, and fixed costs, as well as how the bank will look at you when you ask for financing.

If you want to evaluate your case with numbers and scenarios, we tell you how we work on corporate structures within a comprehensive real estate investment approach.

Asset holding company vs. “operating” limited liability company (LLC)

Before getting down to costs, let’s clarify how they differ and when each is used.

• Asset holding company: focused on holding and leasing real estate assets to generate stable income. It usually optimizes rent management, facilitates financing based on cash flow (WAULT, tenant quality), and organizes family wealth.
• Operating limited liability company (LLC/SL): oriented towards buying and selling (flips), light development, accommodation exploitation, or real estate activities with a commercial component. It assumes more operational risk but offers flexibility to grow and hire.

And a SOCIMI (REIT), cooperative, or club deal?

Alternatives exist for larger portfolios or specific strategies.

• SOCIMI (REIT): listed vehicle focused on rental and special tax regime. Requires size, governance discipline, and dividend policy.
• Cooperatives / ad hoc vehicles: useful for grouping investors in specific projects (building to reposition, for example). They imply clear governance and agreements.

Costs: how much do you need to start and operate without shocks

Incorporating is the cheap part; what is relevant is the recurring cost. Budget well so as not to strain cash flow in month 6.

Startup costs

Includes incorporation and administrative and fiscal startup.

• Incorporation: notary and registry, bylaws, advice for the shareholders’ agreement if there are several participants.
• Share capital: sufficient to cover the cash cycle (taxes, fees, initial works).
• Licenses and registrations: IAE/heading, census registration, bank accounts, insurance (liability, damages), digital certificates.
• Initial accounting: chart of accounts and circuits (invoicing, payments, filing).

Fixed and variable costs

Fixed costs define your cash “floor”; variable costs depend on the strategy.

• Fixed: accounting and tax advice, audit if applicable, insurance, payroll management if you have a team, tools (management software, digital signature), data room hosting.
• Variable: maintenance and CapEx of properties, fees, IBI (property tax), agency and legal fees, appraisals, technical reports, financial costs (commissions, interest).

Obligations: what you will have to comply with yes or yes

Creating a company implies discipline. Better to know it before learning it via penalties or delays at the notary or bank.

Accounting and commercial

Order and traceability are your life insurance when negotiating with banks or the Tax Agency.

• Up-to-date accounting and legalized books.
• Deposit of accounts and, if applicable, audit.
• Updated powers of attorney and agreements (board, administrator, agreements between partners).
• Documentary archive: lease agreements, works, licenses, technical reports.

Tax

The tax burden depends on whether you rent or buy and sell.

• Corporate Tax: taxes profit; in rentals, amortization and expense control are key.
• VAT / ITP-AJD (Transfer Tax/Stamp Duty): depending on the type of property and the operation (new construction, second transmission, waiver of exemption…).
• Withholdings: on rentals, suppliers, and professionals.
• IIVTNU (municipal capital gains tax): if you sell, calculate by both methods and choose the most favorable one whenever possible.
• Reporting obligations: related-party transactions, VAT books, periodic forms.

Labor and compliance

If you hire a team or subcontract work, you will have extra obligations.

• Registrations and payroll, risk prevention, contracts, and time tracking.
• Money laundering prevention in certain cases (intermediation, collection management), KYC, and traceability of funds.
• Data protection if you handle information of tenants or buyers.

How the bank will look at you (and how to improve your options)

Your company will be bankable if the risk is clear and contained. Preparing a good file can lower spreads, extend terms, and reduce guarantees.

What to include in the bankable dossier

The objective is to demonstrate repayment capacity, asset quality, and governance.

• Financial model with scenarios (base, conservative, and optimistic), DSCR, and sensitivity to rates.
• Appraisals and NOI per asset, with evidence of sustainable rents.
• Contracts (WAULT, guarantees, indexation) or commercial plan if it is a flip/development.
• Debt structure: target LTV, schedule, and acceptable covenants.
• Compliance: KYC, real owner, simple organizational chart, CapEx and maintenance policy.

Asset holding or LLC? Signals to decide quickly

• Priority on stable income and family balance sheet → asset holding company with focus on solid contracts and NOI.
• Buying and selling activity or repositioning with asset rotation → operating LLC and agile commercial processes.
• Mixed portfolio: segregate flows (rent vs. rotation) so that financing is not contaminated and taxation is efficient.

Common mistakes that skyrocket costs (and how to avoid them)

• Incorporating without a real budget: underestimating fixed costs and CapEx; at 6 months the cash flow drowns.
• Mixing personal and company flows: the bank penalizes the lack of governance.
• Not documenting: without contracts, appraisals, and reports, there is no bankability or fiscal defense.
• Improvised taxation: ignoring VAT/ITP-AJD and capital gains can wipe out your margin.
• A single bank: without competition, you remain without bargaining power.

Roadmap in 90 days to start well

A short and orderly plan is worth more than months of improvisation.

Days 0–30

Lay the legal and financial foundations.

• Choice of vehicle and bylaws; shareholders’ agreement if applicable.
• Opening of accounts, insurance, and census/IAE registration.
• Design of chart of accounts and protocols (purchases, payments, filing).

Days 31–60

Activate the pipeline and data discipline.

• Dashboard: NOI, vacancy, CapEx, LTV, DSCR.
• Contract templates, due diligence checklists, and data room.
• Pre-agreements with banks, appraisers, technicians, and notaries.

Days 61–90

First pilot operation, feedback, and adjustments.

• Close a small operation with complete protocols.
• Review real costs vs. budget and correct processes.
• Start monthly reporting and prepare quarterly taxation.

Shall we set up your vehicle and put it to produce?

We can help you define the structure, estimate costs and obligations, and get your bankable dossier ready for the first operations.

If you are interested in moving forward with a clear and actionable roadmap, schedule a consultation with us and we will plan it based on your numbers.