What should a good CPA cost for rental properties

Question

Just curious what other landlords out there are paying for their CPA every year.  I file under an S corp with about 23 doors and a flip or two a year with only meeting with my CPA once a year.  His charge seems to go up every year and is almost $2000 this year.  So I am wondering if this is with in the average.

Nathan Gesner · Answer

$2,000 isn't bad. I was filing with a local CPA (also a friend) and she was only charging about $800. I have 12 properties, 30 doors. I've always felt we were getting a good deal.

I recently hired a new CPA that will charge me nearly $9,000. Why am I willing to pay that much? Because my first CPA was a tax filer, which means she was very good at filing my taxes but she couldn't give me strategies to reduce my taxes. The current hire will cost 10x as much but she'll save me an estimated $30,000 in taxes so she's paying for herself three times over.

Brian Hamel · Answer

@David Nino three buildings that make up 14 units, a W2 in a state I don't live in. I end up filling in three states total and it was $500 for all that.

Daniel Hyman · Answer

With increased rental holdings and flips comes increased fees. If you have a great bookkeeper, that will help keep costs down, but my guess is that he is spending some time cleaning up the financial statements. In any event, it sounds like a good price, assuming that the compliance is in order and that nothing is being left on the table.

Joseph Accetturo II · Answer

Why are your properties in an SCorp and not an LLC?  The ONLY reason for this is that you are already a "Real Estate Professional"?

Price seems good.

Travis Hanson · Answer

I think that price is pretty decent.  A touch high but if they are great CPAs it is worth it!

Nathan Gesner · Answer

I won't, for several reasons. First, I'm paying a lot of money for these strategies so it wouldn't make sense to then share them for free with others. Second, many of the strategies are particular to my situation, like a cost segregation study. Third, I'm not a CPA and wouldn't want to give someone the wrong advice.

Basit Siddiqi · Answer

@David NinoThe most important thing it to confirm that the tax return is correct and properly filed with you taking advantage of deductions/credits available to real estate investors.I don't have information on how many state tax returns you are filing and how many properties hold those 23 doors(1 apartment complex vs 23 sfh's), I would have to say that is one really competitive price.

Basit Siddiqi · Answer

That is a huge amount of tax savings on an annual basis.It may be helpful to the BP community to share what your new CPA is doing that your prior CPA was not doing.With that amount of tax savings, you may want to have her look at the prior tax returns filed and if there are rooms for amendinging them and capturing the added taxes paid.

Justin Hoggatt · Answer

I totally get the question and I hate having to pay for taxes every year.  I think that's pretty reasonable, but yes, it's hard to say.  If they are really good at what they do, that $2000 is well worth it and you'll be getting that back in their worth.  You can go to another CPA that just files and doesn't really look into your financials and their cost could be less but you're actually paying for it in the long run.

Aaron Zimmerman · Answer

Depends on the following factors:

1. number of units

2. organization of bookkeeping provided. If it's great, then you'll be paying less in fees.

3. Additional services

Candidly, that's probably a pretty fair price assuming the filing is done correctly. It also depends for tax advisory services as well. They could spend an hour or two preparing for the meeting and have it be an hour meeting. If they're doing your 1040 as well, that's a really good price.

What should a good CPA cost for rental properties

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