CPA for One Rental?

Question

Hello, I'm pretty new to real estate investing. I have one long term rental in the Kansas City, MO area. I'm currently having to do some foundation work on it which comes with a pretty hefty bill. So that has finally got me motivated to look for a CPA with some real estate experience. The thing is, I only have one rental. A lot of these real estate specific finance pros seem a little too advanced (and expensive) for me. Does anyone have any recommendations for a CPA that is happy to work with a small landlord? I'm fine working with someone local or remote. Thanks in advance for any advice you can give!

Simon W. · Answer

You're definitely not too small. Plenty of CPAs work with people who have one or two rentals. You just want someone who does a good number of rental returns and doesn't treat it like an afterthought. When you talk to someone, ask how many rental clients they have and how they'd handle your foundation job. That's a pretty good test question.

The foundation work is the big thing this year. Depending on what was actually done, it could be a repair you deduct now or an improvement you depreciate over 27.5 years, and on a bill that size the difference matters. Before you meet with anyone, pull together the contractor's invoice with a description of the work, proof of payment, and anything that shows why it was needed, like an inspection report or photos of the crack or settling. That makes the conversation quicker and cheaper.

Also keep the closing statement from when you bought the place handy. They'll want it to check your depreciation basis if it was never set up right.

Alex Olson · Answer

You can try Bevs.tax as they have helped me in the past.

Ashish Acharya · Answer

Alice, I actually think it’s smart that the foundation work pushed you to look for a CPA with real estate experience. You don’t need to own 10 properties before that becomes valuable. With a large project like foundation work, I’d have the CPA look at exactly what was done and how the costs should be treated. Depending on the work, some costs may need to be capitalized rather than deducted as a current repair, so I’d keep all the invoices, contracts, and details of the work.

I’d also make sure your rental books and depreciation are set up correctly from the beginning. Even with one property, getting the basis and expense tracking right can save you a lot of trouble later.

We work with real estate investors at different portfolio sizes, so having one rental definitely doesn't make your situation too small to get proper tax guidance.

Feel free to DM me I’d be happy to send over a few resources that might be helpful.

Aaron Zimmerman · Answer

It’s smart that you’re looking for professional help early on. One of the biggest investor mistakes I see is getting basis wrong which impacts depreciation for the hold period of the property. I’d be looking for someone that can you help calculate basis, review your bookkeeping, and help understand your return. I have a few referrals for CPA’s that can be of help. Please pm me.

CPA for One Rental?

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