Landlords Have Too Much On Their Plates to Be Accountants

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  • Cliff BennerBusiness Member
    Accountant · Denver, CO · Member since 2020 · 394 posts · 183 votes
    1y

    I tell potential clients all the time to outsource their Accounting and Books first, it is so easy to mess up and lose out on expenses or not read a Tax Return correctly to know if a Tax Accountant did it right. I've caught Tax Accountants who didn't add the Rehab to a BRRRR and didn't even deduct it, causing the basis to be wrong which messed up deprecation and will mess up their basis too.

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  • Jake BakerBusiness Member
    Flipper/Rehabber · San Diego, CA · Member since 2020 · 1k+ posts · 696 votes
    1y

    As a bookkeeper who works with real estate investors, I’ve seen firsthand how many landlords underestimate the time and money lost to DIY accounting. Between tracking expenses, reconciling accounts, and staying audit-ready, it adds up fast. Hiring someone who understands real estate bookkeeping frees up your time and helps maximize deductions and spot inefficiencies. If you’re scaling your portfolio, professional books aren’t just a luxury but a necessity.

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  • Max Emory
    Accountant · 100% Remote · Member since 2019 · 497 posts · 216 votes
    1y

    Great article, Ashley!
    Bookkeeping for REI (especially rental property companies) is super nuanced. For example, for rental properties, lots of the categorization depends on the REI's specific tax strategy regarding what we're capitalizing versus what we're immediately deducting. It's heavily dependent on what the tax code allows and who is interpreting the tax code. There's room for flexibility depending on the desired tax strategy.
    As my colleagues, Jake & Cliff have said, it pays dividends to work with an REI-savvy bookkeeper and tax pro. It's a non-negotiable once your portfolio has reached a certain size if you want accurate and up-to-date financials at your fingertips to make good decisions.
    Happy tax season!

    - Time Capital Bookkeeping (REI myself since 2019)

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