Hi, I'm new to real estate investment. I recently purchased a 2 unit home in southern Maine. I couldn't be more excited about the purchase. I moved in Jan 1st but I realisticaly won't be getting a tenant in the other unit until March or April. We will be living in the other unit and are completely okay having a unit vacant for a few months while we figure out exactly how to go about the rental process. My question is a fairly simple one. Should I hire a real estate accountant? I'm leaning towards yes but I don't want to waste the money if I hear from everyone that an owner occupied 2 unit is simple enough to do on my own.
Hi @Dan Fields - Welcome to BP!
You can do it on your own, as long as you have the right tools in place. For starters, I use Quickbooks to track my financials. It will import into TurboTax, when I report my taxes at the end of the year.
There may be an argument to hire an accountant, since you can typically deduct these expenses from your profits (pay less in taxes).
Hope that helps!
You should have an Accountant file your taxes at the end of the year. However, QuickBooks will help you take care of your accounting until then and give you reports to give to your Accountant at the end of the year making his or her time spent on doing your taxes more financially affordable, because they won't have to do so much work in figuring out your returns because QuickBooks has it all organized for them. Less time they spend on doing your taxes, the less money you pay them.
In our Industry, only an accountant knows the tax breaks that we get on our investments. Our Industry is like no other. We shouldn't ever try to file our tax returns ourselves because there are so many laws, and stuff that we need to do regarding our investment, that only an Accountant can know. Besides, when you have an Accountant do your taxes, less chances of you being audited. Plus they know the "loop holes" and how to save you money in the long run.
I am a Sales Agent with Keller Williams and I also have experience with Quickbooks consulting. Quickbooks is relatively easy to use and will cost you about$15 a month.
That said, it does take some time and you can easily track your rents and expenses easy enough using a spreadsheet.
Your tax accountant can use your spreadsheet to compile your tax return.
accountant, Are you kidding?
You don`t even need Excel.
Just write down the income and expanse.
It is an good issue to consider upfront .... One diagnostic that I have seen help people decide this issue: do you do your personal taxes, itemized and handle things like capital gains, credits, etc. ? If so, look at schedule e and see if it looks do-able (or absolutely foreign). You may be able to tackle it.
However, if you don't do your own taxes or have only done like a 1040 EZ (and depreciation sounds like something a bad tenant does) find a good cpa with some real estate background. Best of luck....
My goodness people. Our industry requires an Accountant. If you want to assure yourself of being audited, I'd say do your taxes yourself.
You deal with tens of thousands of dollars of investments in your real estate. And you deal with other people's money. Do you think the Government won't have their eyes on you. Just sayin!!!
You do not need a spreadsheet,
When QuickBooks is on your desk
It takes care of all that red tape
And makes you look your best
It keeps track of all your income
less expenses per building too
It tells who owes you money
and who you owe money to.
It's not that hard to learn it
Everything in life takes time
But QuickBooks can be your very best friend
I know it's certainly mine.
Just felt like writing a poem today.