How Valuable is Tax Accounting to Real Estate?

11 Replies

Hi everyone,

I'm graduating with my Bachelor's degree in Accounting in May 2015. I have applied to both the Master's in Accounting program as well as the Masters in Tax program at my university, and I cannot decide which one would serve as more of an asset in my ultimate goal of entering the real estate industry.

I have done extensive research and have yet to find answers pertaining to my particular situation. I've even asked professors, to which most just told me to choose the one I was more interested in. I'm leaning more towards tax at this point because I think it would serve as more of an asset not only to my own future investment/business strategies, but to other investors' strategies as well.

As of right now, I don't want to be an accountant for the rest of my career; however, I know by gaining experience in a firm that works with the real estate industry I'd be able to absorb knowledge about different types of real estate, investment strategies, and their tax implications.

I fell in love with real estate investing because of the challenges, risks, rewards, and opportunities it can create. I want to be able to provide a plethora of opportunities for the younger generations in my community, because currently there really is not a large enough outreach from this particular field where I live.

In terms of actual job experience, I am a rookie to both accounting and real estate. As a full-time student, I study real estate investment strategies, read blogs/forums, and keep track of the market when I'm not doing work pertaining to my degree. I've applied to many part-time accounting-related positions for experience as I transition to graduate school in the Fall, but cannot get hired because I don't have experience.

With all of this being said, I have no clue to whether the path I am choosing (tax) is going to give me the best opportunity for real estate or if I'm wasting my time/resources on skills I might not use as much when I actually reach my goal to be an investor. All advice is welcome!

Thanks,

Taylor

@Taylor Lopez - do you have to go straight into a masters program?  If you are unsure what you want to do, you may consider taking a little time off to explore doing something in the real estate industry.  Just a thought, as grad school is a big financial and time commitment.  

Jonna Weber, Real Estate Agent in ID (#SP41257)
208-608-4884

I've found that Real Estate focused CPA's are invaluable to any long term planning. For high net worth individuals Tax Planning as part as an overall investing strategy is critical to long term success.

A standard accounting degree isn't going to get you very far into real estate or make you as useful to an investor.

@Jonna Weber - Thank you for your response.  In order to obtain my CPA licensure I have to meet a 150 hour educational requirement.  I'm graduating with 124,  so my plan is to fulfill it with a specialty degree that is most applicable to real estate. Since I already have so much time/money invested in accounting, I figured that obtaining a MTA would make the most sense. Most firms, at least from my knowledge, won't hire a Tax Accountant unless they have their MTA. I really just want to maximize the potential utility of my degree while at the same time reach outside of accounting into real estate. 

Do you know of any tax accountants that have gone directly into a real estate company with only a MTA and no CPA licensure or is that unheard of? 

@Jonna Weber for some reason the tag did not show up yesterday and would not allow me to edit my response above. 

@Troy Fisher I apologize for the late reply, but that is exactly the information I needed to know. I appreciate your advice.

Taylor,

Just as a followup to help you get through the thought process, most investors either do their own accounting, have a property manager who does the daily accounting, or hires a bookkeeper to keep their records. There's little to no difference between regular accounting and real estate focused accounting. Its all debits and credits.

On the other hand, being able to have a great understanding of the complicated real estate tax structures and being an expert in that field is going to 1) Give you a much better understanding of the true benefits of real estate, 2) Set you up to be an integral part of other peoples teams.

@Taylor Lopez - I am sorry, I don't know anyone personally in that situation. Perhaps connect with @Amanda Han here on BP. For some reason it appears that I am not successfully able to tag her on this post. She did an excellent podcast last year and speaks as a REI investor/CPA. I wish you the best!

Jonna Weber, Real Estate Agent in ID (#SP41257)
208-608-4884

I think (getting licensed to) providing expert advice to people that have the problem of "too much money" will remain a very solid skill for as long as progressive taxes will be levied to the "rich". Just accounting is a small part but pair that up with alternate asset investing strategies a(aka real estate one example) and you become much more powerful than just a simple CPA.

I do my own accounting using as much technology as it's available, and I find it very easy. Most pain on real estate comes from keeping your expenses. Been doing my oqn taxes via turbotax for past 15 years, it's never complicated. But again, use tech, and be diligent to record the stuff as it happens not just throw into a pile and shove it to the CPA once a year.

Lately I really love "wave" app, that sucks it all from all the banks and credit cards and I set aside myself 1 hr a week to categorize all new transactions that are pulled in. Very easy. Then the CPA does the final stuff and efiles. I suspect the CPA role will become more and more replaced by tech (what isn't these days). Keeping a great advisory expertise is key imho.

@Taylor Lopez

If you want to do real estate, you have enough accounting now. The time and money to get your MBA will never get paid back in real estate success. You know enough already. You could pay an expert for a couple hours time and get the expert info you need.

Unless you just want the degree. If I were you, I would get a job as a staff accountant, either for a CPA firm(if you have the temper-ment)  or an industry corporation. Then start your investing career. Over time the accounting career can be switched to working for yourself.

I graduated with a degree in Accounting, passed the CPA exam, and got a job in a private industry. I excelled at it. Loved accounting and being a CFO/Controller. i loved the corporate world. I realized very quick in my accounting career that I was not a CPA Firm type. I hated tax work and liked the industry and business environment. After twenty years I transferred out of an employee relationship and for a while became a contract accountant and also full time REI.

You might find that being an accountant for a company might be just the ticket to get you in the door to the investing world.

I

CPA here. @Troy Fisher was absolutely right. Putting "CPA" after your name is much more valuable in the accounting world than a Masters.

As far as getting those 150 credit hours, check with your state on what they need to be. If your degree gives you all of the accounting credits you need, you could just sign up for some online classes at a community college and knock out the rest. 

I graduated with 138 credit hours, started sitting for the exams, and finished my remaining 12 credits with online classes like Art Appreciation and Astronomy. They were fun, easy, and inexpensive. The new 150 credit hour requirement was nothing more than an extra hoop to jump through - don't spend the money and effort on something that won't benefit you once you're in the industry you want. 

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