When will an investor need accounting help

Question

I looking for feedback for my business. As an investor when would you consider hiring a bookkeeper/accountant? How important is this for you?

Alecia Loveless · Answer

@Massiel Pezzino I’ve always had an excellent accountant to do my taxes. Two years ago when I hit 6 properties and about 24 units he told me I needed the help of a bookkeeper because my system was not sufficient. I was trying to use QBO without any knowledge of the system.

I’ve since hired a great bookkeeper who set systems in place in QBO and it’s been great. She did offer to teach me to do some of it myself but I’ve decided that’s not the best approach for me.

You can easily hire someone to set you up a system. I’d recommend starting sooner than later and you’ll see it makes figuring out your finances much easier.

Max Emory · Answer

Hey @Massiel Pezzino, I'll speak to the bookkeeping side of this. It really depends on your cash flow, area of expertise, and how you want to spend your time.

For our clients, they make much more money having us do their books because they consistently have the financial clarity they need to make big decisions for their business, the next deal, etc. This mixed with us saving them a ton of time every month is a potent combo for them.

For others who may not have the cash flow to hire or maybe they have an accounting background and enjoy doing bookkeeping, hiring us may not make sense for them.

Regarding the tax side of REI, get an REI-savvy CPA/tax pro as soon as possible. I hired my first REI-savvy tax pro after purchasing my first duplex and they saved me way more money than I ever paid them. This is almost always the case with good tax professionals in the real estate space.

Hope that helps!

Aaron Zimmerman · Answer

I would consider hiring a bookkeeper after 5 properties/when bookkeeping becomes too big of a time burden/you become out of your depth.

I would hire a tax accountant as soon as you buy your first property. A good tax accountant can find additional deductions/ask questions that may unlock additional deductions.

Chris Seveney · Answer

Bookkeeper - whenever you do not want to manage the books

ACcountant - year 1 after you buy a property you should have someone doing your taxes and make sure you take all proper deductions etc.

Nicole Heasley Beitenman · Answer

Hey Massiel! I'm an accountant and bookkeeper specializing in RE.

It really depends on your time and knowledge. If you set up a solid automated system off the bat, you can probably self-manage a good number of properties before needing to outsource help. Some find Excel works for them for their first few properties, but since there's free bookkeeping software out there, I recommend setting up an automated bookkeeping system from the start. If you don't know how to do that, I recommend consulting a professional to help you get your software set up and maybe provide some basic training. And hopefully, once you do scale to that level where you need to bring in a third party, you already have someone you know, like, and trust.

But what it really comes down to is whether or not you have the time to dedicate to bookkeeping each week. If you find yourself constantly falling weeks or months behind because you're too busy to sit down and manage your books each week, that's the clue it's time to look for help.

Ryan Spath · Answer

@Massiel Pezzino

We manage our own bookkeeping in-house using an Excel spreadsheet system tailored to our rental portfolio. Each property has its own dedicated tab, where we meticulously track income and itemized expenses. This allows us to clearly see the financial performance of each unit.

At the end of the spreadsheet, we maintain a consolidated summary tab that provides a high-level view across all properties — ideal for reviewing overall cash flow and portfolio health.

We currently own a dozen long-term rental properties, and classifying monthly expenses typically takes about an hour. To keep things clean and organized, we use a separate business credit card and bank account solely for our rental operations, ensuring there’s no co-mingling of personal and business funds.

For tax purposes, we partner with a CPA who handles all of our filings and provides guidance on deductions, depreciation, and compliance.

Hope this helps!

When will an investor need accounting help

When will an investor need accounting help

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