A special purpose vehicle (SPV) is a limited company created for one job. In property investment, that job is to own and manage a single building or a small, defined group of buildings.
Why use a separate company for each property?
- Ring-fencing. The assets and liabilities of one building are kept apart from every other.
- Clear ownership. Investors hold shares that are recorded in the company's register of members.
- Transparency. The company files accounts at Companies House, so its finances are on public record.
- Clean exits. The property can be sold, or the shares transferred, without disturbing other investments.
Who runs the SPV?
A manager appointed by the operator runs the company day to day: collecting rent, arranging repairs and insurance, preparing accounts and paying distributions. The articles of association and a shareholders' agreement set out investors' rights, including how major decisions are made.
What to read before investing
Ask for the articles of association, any shareholders' agreement, the latest valuation, the lease or tenancy schedule and details of any debt. Our due diligence checklist covers the rest.
This guide is general information, not financial, tax or legal advice. If you are unsure whether an investment is right for you, speak to a regulated financial adviser.