Business structure, tax preparation, and deduction management are important aspects of real estate business and must be handled carefully. It is in these critical aspects that savvy investors surpass other competitors by hiring professional real estate accountants to provide services.
Although many new investors want to give up on the idea of hiring a certified public accountant or tax professional, knowledgeable investors know that having an accounting expert can save them a lot on their investment pursuits in the long run.
Why Hire a Professional Accountant?
1. Hiring accounting professionals can enable real estate investors to perform endless bookkeeping tasks that may affect their investment or success or failure throughout the year.
The hired professional usually spends time researching the real estate investment industry on behalf of the employer and grasping trends and tax changes that may be relevant to the client’s investment. Therefore, accountants work with real estate investors to ensure portfolio savings on their acquisitions.
2. Accounting experts help real estate investors organize their businesses and investments in a tax-efficient manner.
Accounting professionals participate in budgeting, planning, investment, and tax reporting activities and help real estate investors make informed decisions. Generally, accountants prepare financial reports and records for all real estate transactions, which may include rents, real estate sales, timeshares, and leases.
These reports typically include items such as operating expenses, development expenses, and profits. Accountants also produce expense and income cycle reports, cash-based income statements, lease summaries, and other financial items. Based on regular reports, real estate investors can develop practical and effective financial and investment strategies.
3. A good accountant can assist you in finding other individuals you need to work with as an investor.
Finding the best insurance agents, lawyers, real estate agents, and other professionals to work with is usually a problematic affair for investors. Though, having a experienced certified public accountant can make the task more manageable as you will be well versed in the various business structures, levels of legal protection, and financial perspectives of hiring other experts. In addition, your accountant will offer impeccable advice on hiring strategies that will save you money.
4. When investors make decisions with the help of a well-educated accounting consultant, the investment is protected from sudden market shocks.
The accountant will also coordinate appraisals, capitalization activities, and asset appraisals.
5. Accountants can help real estate investors use leverage carefully and increase their holdings with extremely low risk.
Indeed, successful real estate investors usually accomplish such feats not by searching receipts and viewing financial spreadsheets, but by having professionals perform these tasks and provide them with the best advice.
Selecting an Accountant for your Real Estate Investment Business
Real estate investors should choose accountants who can be trusted and be aggressive to help them save money and improve their return on investment. But accountants should also be conservative enough to help investors avoid trouble with tax authorities. With such a clear goal, real estate investors should be prepared to interview several CPA professionals before choosing who to work with.
Investors can obtain CPA recommendations from Real Estate Investor groups, local investors, and other professionals (including real estate agents and lawyers) who have a good relationship with them. Generally, the expected relationship with accounting professionals is usually long-term, and investors should choose suitable professionals who can work with them to achieve long-term success.
When interviewing potential accountants, real estate investors should learn about accountants’ training, certification, and licensing. They should ask about the accounting and tax areas in which the accountant specializes and their services.
Additionally, real estate investors should learn about the accountants’ past, including whether they have personally invested in real estate, their rates, tax preparation and strategy, references, and accounting software. Accountants should also explain their communication strategies and ability to assist with structuring and registering a business.
Even if you are starting your real estate business by throwing your bills in a shoebox, you should make an effort to ensure access to a CPA professional’s services, planning, and financial prudence. However, you should avoid being your tax professional’s least favorite client by bringing an unorganized box of papers and develop a system for your finances.
Accounting experts can help you build your own real estate empire intelligently and use many tax strategies involved in real estate investment. Indeed, real estate investors can increase their investment income through the consultants of certified public accountants (CPA) professionals and overcome the numerous risks involved in real estate investment.
If you would like to grow your portfolio and purchase more properties, talk to one of our management experts to find out how Propertycare can help you maximize your efforts. CALL NOW! (713) 489-7653