Why You Need a Real Estate Accountant
An average real estate investor bases the success of their business on the prowess to close deals. For a smart real estate investor having a good business structure is crucial. With the best administrative practices, it is easy to beat competition.
The secret of prolific real estate investors is having an excellent team of professionals. They are the pillars that support a business in all aspects. Running your business and taking care of financial and legal issues can be tedious. A real estate accountant is among the most essential employees to have on board.
Real estate accounting principles can build or demolish your business. Without the required knowledge, you will have to take time to educate yourself. But why carry such a heavy load?
An accountant will simplify the complexities that come with real estate transactions. This is due to their rich knowledge in tax preparation and real estate regulations.
Are you ready to upgrade to a smart real estate investor with realistic strategies? Keep reading to understand why you need an accountant for your real estate business. Also, find out how to select a real estate accountant that fits your business.
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Choosing a Real Estate Accountant
This is a professional that provides the true financial position of your real estate business. A real estate accountant’s duties include budgeting and tax preparation. They also come up with annual financial reports.
Why you need a real estate accountant
#1: Ensure accurate financial documentation and reporting
A real estate accountant will organize all your financial documentation and reports. This is in relation to every financial transaction.
The financial documents and reports are in labeled files and in accounting software. This is to help check your business. The information is also very essential for audit and tax purposes.
#2: Help in making good business decisions
The well-prepared financial reports include cash basis income statements. This statement shows your income. It also outlines well-classified expenses. The amount of tax paid and your final net profit is also available.
A real estate accountant will analyze these financial reports. The reports will provide a clear view of the financial status of your business. This will help you make fact-based decisions for the growth of your real estate business.
#3: Enable optimization of investments
A real estate accountant has a broad knowledge of real estate operations. They will thus assist you to budget and prepare your real estate transactions. An accountant will provide a detailed analysis of investment decisions. This is by calculating estimated returns for different projects.
From the calculation results, you can analyze the viability of a project. You will choose an investment with the highest expected returns. A real estate accountant is always updated on different market cycles. You will know the time to get a new property and a time to sell.
#4: Provides legal protection
A certified accountant has in-depth knowledge of the IRS rules and regulations. A real estate accountant is always informed. They are updated on the ever-changing tax codes relating to real estate.
A good accountant will carry out the required tax reporting activities. You will learn your tax obligations. This will keep your business legal at all times.
#5: Save your money
With a real estate accountant, you will discover and leverage new tax-saving opportunities. With this information, you will make decisions keeping in mind the tax implications.
Also, a qualified real estate accountant will help you invest in the right places. This will boost the growth of your real estate business.
Finding the right accountant
Like other professionals, your aim should be to hire a smart and organized individual. A detail-oriented and easy to work with a certified accountant will be a gem.
One who will guide you to make the right decisions to increase your returns in investment. At the same time ensure your business remains tax compliant. To get the right candidate you should consider the following factors:
#1: Certifications and licenses
The potential accountant should have the right credentials and accreditations. Having a practicing license is essential. A qualified accountant is usually a member of a tax or accounting professional body.
#2: Field of specialization
An accountant with experience in working with other investors is a good choice. You will be sure they understand how to deal with real estate transactions. They will have know-how on the kind of financial documents and reports to prepare. The accountant should know a specific accounting software that fits your real estate transactions.
#3: Knowledge of current rules and regulations
The prospective accountant should know current rules and regulations. This is in relation to the real estate industry.
This should include changes in the tax code. The right candidate must have a tax administration background. Better still experience of using tax software and an encounter with the IRS is a plus.
#4: Fit for your business
Question the kind of services they will offer to your real estate business. One must have the ability to customize their services. Which will help you achieve your objectives as a business.
It is also crucial to check on the years of experience. Depending on your business structure you will need a given level of expertise.
This should go hand in hand with their charges. You should choose a real estate accountant whose services are within your budget.
#5: Strong referrals and reviews
A referral from another investor can find you a real estate accountant. Get reviews from those they have worked with before. This is to be sure you are hiring the right person. An easy individual to work with will be a relief to both you and your business.
A real estate accountant can speed up the growth of your real estate business. This is through ensuring you make the right decisions that will help your firm succeed.
But, it is not about hiring. It is about getting the right real estate accountant to fit the nature of your business. One who will drive you to achieve your long-term business objectives.
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Nick Foy, founder | Under30wealth.com
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