Property is a valuable asset, but owning it carries risk

My professional insights · Lyudmil Karaulanov · 6 min read

Published: 1 August 2026 · Version 1.0

Before a property purchase, there is one conversation that can easily be squeezed out. The viewings are over, the price has been agreed and the bank is waiting for documents. Everyone wants the transaction finally to be completed. That is when someone asks whose name the property will be in, and the question sounds almost like a technical detail.

In my view, it deserves more attention. You may be buying a building for production, while expecting its rental income to support your family in years to come. Or you may want your children to inherit the property without necessarily taking over the business. These intentions deserve a place in the decision now, while you are still free to choose how the property is acquired.

What do you want this property to do for you?

For me, this is the starting question. One property may enable the business to operate, another may generate income, and a third may have been bought with a view to development and sale. Sometimes we expect one building to fulfil all these roles. It is then worth examining where those expectations diverge.

If you are relying on the property for your family's peace of mind, it matters whether it is exposed to the operating company's liabilities. If production would stop without it, it matters who can terminate the right to use it. And when it serves as collateral, the question is what you are prepared to put at risk in return for the financing you receive.

Personally owned property used by the company

Personal ownership has its appeal. Your name is on the title deed, and the sense of control is immediate. But this also brings the property within your personal financial and legal affairs: your matrimonial property regime, succession and liabilities.

The situation is familiar: the company uses the building and pays for improvements over many years. As long as the company and the property belong to the same person, no one may see a reason for detailed arrangements. When the business is sold or the property passes to heirs, however, someone will have to explain what belongs to whom and who paid for what.

That is why rent, maintenance, taxes, insurance and improvements deserve clear arrangements. The next person will then not have to reconstruct your intentions from old invoices and other people's recollections.

When the operating company is the buyer

There is an understandable logic to this decision too. The company needs premises, has revenue and can seek financing. Along with the convenience, however, comes the property's exposure to the company's trade liabilities, loans and disputes.

It is also worth looking ahead to a future sale of the business. Do you want the buyer to acquire the building as well? Or would you prefer to keep it and receive rent? If this conversation is postponed until negotiations begin, separating the property may already be more complicated and more expensive.

A separate company also needs clear arrangements

The property can be held by an investment company that makes it available to the operating company. This allows ownership to be separated from the direct risks of operations and to remain with you if you sell the business.

Simply registering a second company, however, is not enough. The real picture emerges from the rent, expenses, improvements, financing and security arrangements between the two companies. If the property company has guaranteed the operating company's obligations, some of the risk may have remained precisely where we intended to remove it from.

It also matters who makes decisions in the company that owns the property. Who can sell or mortgage it? What majority is required? How is continued use protected if the shareholders fall into dispute? These questions reveal how secure your control really is.

Looking beyond the tax on the transaction

Tax and accounting assessments are a necessary part of preparation. In my view, they deliver their full value only when considered alongside control, financing, succession and a future sale. An immediate saving takes on a different value if, years later, it makes the very purpose for which you bought the property harder to achieve.

Where is the point of instability?

What this concept means →

It arises when you expect the property to provide one kind of security, while the ownership arrangement has exposed it to a different risk. The building may be a good purchase and still occupy the wrong place in your ownership structure.

That is why I believe choosing the owner begins with the question of what you want to preserve for yourself and for those who come after you. Once that is clear, the choice ceases to be a technical detail: the property's intended role is understood, along with what needs to be protected around it.

This material is of a general analytical nature and does not constitute individual legal, tax, financial or investment advice.