Finding The Right Accountant For Your Real Estate Business

REtipster provides real estate guidance — not legal advice.

The information in this article can be impacted by regional legislation and other unique variables. For the real deal, always consult with a qualified legal professional before taking action.


Bored BusinessmanFinding the right accountant is something a lot of real estate investors (both new and experienced) have an extraordinarily difficult time with.

An accountant is an undeniably important member of your team that can play a HUGE role in your ability to:

  • Find and leverage as many tax benefits as possible (of which there are MANY for real estate investors).
  • Follow the legalities of our ever-changing tax code.
  • Keep track of your ongoing business transactions.
  • Stay organized, using a financial record-keeping system that makes sense.

This person is a vital component of your business. If you’re trying to wear this hat by yourself, I can almost guarantee you’re either leaving money on the table OR working a lot harder than you need to.

Similar to a property management company, a good accountant can be worth their weight in gold. These people can save you MUCH more than they’ll cost and in the long run, they will easily justify the expenses they incur for your business. When you’ve got the right accountant, you’ll be thrilled to pay them every year (because they’ll be delivering more value than they cost).

How To Interview An Accountant

As a real estate banker, I’ve had to look through thousands of tax returns over the years. Believe me – not all accountants are created equal. Some of them are disorganized, make mistakes, don’t communicate well, aren’t responsive and don’t understand how to find the right tax breaks for real estate investors. On the other hand, some of them are brilliant, easy to work with and save their clients gobs of money (paying for themselves many times over), all because they know what they’re doing.

Luckily, I have a bit of insider knowledge in this realm because not only do I have a lot of experience looking through accounting work in my banking and real estate investing career, but I’m also married to a CPA. My wife has worked in the field of public accounting since 2006 and she has a wealth of experience with dozens of different businesses.

I sat down with her and we compiled a solid list of questions (both from an investor’s perspective and a CPA’s) that you can use to find the right accountant for your business. These questions will help you get a comprehensive understanding of who you’re dealing with BEFORE you commit to paying them a dime.

Once you’ve landed on two or three accountants (or accounting firms), give them a call and run through the following questions:

General Background:

  • What types of businesses do you typically work with?
  • Do you specialize in any particular niche of business accounting?
  • How many of your clients have a similar structure to my business? (note: you’ll have to explain how your business works before they can answer this)
  • Are you a stand-alone shop, or do you work for a larger CPA firm?

Regarding Their Level of Expertise:

  • Are you a CPA? Do you have any other certifications that would give me a reason to hire you? (note: a certified public accountant is a “bonus”, not a “must”, for what we need them to do)
  • What kinds of services can you provide for me (e.g. – quick books, tax returns, tax planning, tax advice, anything else)?
  • How many years of experience do you have as an accountant?
  • What percentage of your clients own income-producing real estate?
  • Do you own any investment properties yourself? If so, what kind are they (e.g. – rental properties, vacation home, farmland, properties you’ve sold on land contract, etc.)?

Setting Proper Expectations:

  • How much capacity do you have for additional work at this time?
  • Would anyone else in your office be handling my books? If so, what is THEIR level of expertise in real estate accounting?
  • What kinds of ongoing things will you need from me in order to do your job? What will I be expected to do?
  • What do your services cost (based on the specific duties I need you to perform for me)? Do you charge hourly, monthly, annually?
  • Are there any particular ways you can help me save money on taxes?
  • Will I have to sign a contract/agreement if we decide to do business together? If so, can I review it beforehand?
  • Can you give me any references? (note: not all accountants can provide this to you because it may breach their confidentiality agreements. This question is worth asking – but if they can’t provide any references, this shouldn’t be a show-stopper by itself)

Depending on the answers you get from these questions, you could expand the conversation even further – but in most cases, the information you’ll learn right here will give you some very strong indicators as to whether or not you’re dealing with a competent real estate accountant.

A good accountant is one who should be able to explain fairly complicated topics in language YOU can understand. As you open up the lines of communication with these initial questions, you’ll see pretty quickly how skilled they are at explaining themselves and conveying complex concepts in language that makes sense to you. Remember, it’s not your job to know the tax code, all the strange acronyms and government regulations. You’re paying THEM for this expertise and they should be able to apply this knowledge to your benefit.

A good accountant is also one who will respond to you quickly (within 48 hours or less), regardless of whether you reach out to them via phone or email. If they don’t respond within a day or two, if they don’t respond AT ALL, or if they respond in a way that doesn’t make sense or answer your questions – drop them like a hot potato and look for someone else.

You don’t have to settle for sub-par. If this kind of highly paid professional can’t impress you with their first contact, they aren’t likely to do any better as you develop a working relationship with them.

The Devil is in the Details

I cannot emphasize this enough. If you’re running a business that is even remotely complicated, it is very important that you’re working with an accountant who pays attention to the details.

Accountant

Most accountants (at least, most of the ones I’ve met) aren’t necessarily the most “charming” or “colorful” personalities you’ll ever meet. If you’re interviewing an accountant who isn’t coming across as a natural-born salesperson, this isn’t a bad thing (in fact – if anything, I’d say this a good sign). When it comes to the core competencies of an accountant (i.e. – the person who will be doing the actual work for your business), personality is NOT a prerequisite – it’s just an added bonus.

As human beings, most of us will naturally gravitate towards the people we “like”, but remember – we want to find the person who is best equipped (with the right experience and know-how) to serve this aspect of your business. This doesn’t mean they need to be charming. Your goal with this interview is to uncover the facts, not the fluff. At the end of the day, an accountant’s skills and attention-to-detail has very little to do with their personality – so make sure you’re looking for the person who come across as the best qualified. All else is secondary.

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About the author

Seth Williams is a land investor and residential income property owner, with hundreds of closed transactions and nearly a decade of experience in the commercial real estate banking industry. He is also the Founder of REtipster.com - a real estate investing blog that offers real world guidance for part-time real estate investors.

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  1. ACA Track says:

    Really that is very interesting information thank you for posting it.

    1. Seth Williams says:

      No problem – glad you found it helpful!

  2. Thomas Skinner says:

    Thank you so much!!! I’m in search for an accountant at the moment and i’ll will be using this information.

    1. Seth Williams says:

      Awesome! Glad I could help Thomas!

  3. Newbielandlordchick says:

    Similar to Thomas S. I too I’m in search for an accountant at the moment and will be using the great information your provide in your blog to find the right accountant for my real estate business. Thank you Seth!

    1. Seth Williams says:

      Glad I could be of help! Thanks for letting me know!

  4. Brian says:

    Thank you for the post!

    1. Seth Williams says:

      Absolutely Brian! Thanks for reading!

  5. Chris Winters says:

    Seth, it makes sense to ask a certified accountant about their background. I happen to struggle with organizational skills, so I’m always losing important financial documents. I think that I should find a professional accountant that could help me this upcoming tax season.

    1. Seth Williams says:

      Thanks for sharing your thoughts Chris! I wish you all the best in finding a good accountant this tax season.

  6. Jacky Pierre, CPA says:

    Seth,
    Thanks for a very interesting article. I have few real estate agents/brokers as clients myself. I look forward to reading more of your articles.

    1. Seth Williams says:

      Thanks Jacky! It’s always good to have a CPA with some real estate expertise. 🙂

  7. Jazzy Bricks says:

    Well Informative & Appreciated the way you explore to Real Estate Business. I must say here, Educate your self before investing at any organization, You should well known of Pros and Cons and Terms & conditions for investing money..!
    I usually follow some great Real Estates Blogs, Attended Webinars & explore my question by Social Platform..I easily get different views & advice’s by Experienced Holder..!

  8. Qasim Butt says:

    Do you find that the bigger accounting firms are better at knowing the tax code and getting more deductions? Or do you find individual or small accounting firms just as good? What about the cost of both?

    1. Seth Williams says:

      Hi Qasim – that’s a great question. I think the answer is, “it depends”.

      Some of the bigger accounting firms may have more resources and human capital at their disposal… but that doesn’t necessarily mean that YOUR accountant will be smart enough to connect the dots and use those resources to benefit your situation specifically (but they might). Some smaller shops can be great too, but when less people are involved, it becomes increasingly important that the person you’re working with is smart and resourceful – because if they don’t do a good job for you, there will be fewer people to back them up and make sure you’re getting what you need.

      These are just my thoughts and opinions of course – I think either route can work, you just have to make a decision and pay attention to how good a job they’re doing. If they aren’t cutting it, you can always move on to another firm.

  9. Sharon says:

    Thank you so much for the article. I didn’t have any idea how to begin shopping for a cap for real estate.

    1. Seth Williams says:

      Thanks for reading Sharon! Glad you enjoyed it!

  10. Mark Padolsky says:

    A lot of people think that there has to be this perfect platform wherein you can train your skills as a real estate investor. If you are still asking where to train real estate, well the answer is simple, you can look at everything as a form of training. Even conversation! Yes, although hard to believe, talking with other real estate investors usually help you improve and also serve as a training for you.

  11. Ashley Turns says:

    The business I work is looking for an accountant to help us through tax season. So thanks for suggesting that we ask them about the kind of services they offer and how much experience they have. I’m sure that my company will want our accountant to be able to help us with our taxes (obviously) and to also have some experience helping small businesses so they understand the best steps to take.

    1. Seth Williams says:

      Thanks for reading Ashley! I’m glad you found it helpful!

  12. Ofer says:

    Thanks for the post.
    I have a slightly different question.
    I already have an accountant, which I used before for filing my personal taxes, and is now also handling my rentals, but every now and then I get a feeling they may not be experts in the field and that I could be losing some tax breaks.
    How can I test them to know if I need to switch to someone else ?

    Thanks !

    1. Seth Williams says:

      That’s a great question – I suspect a lot of people may be in this situation. As for “testing” them… that’s a tricky one, because you can only test them on what you know, and in most cases, you aren’t going to know more than someone who spends every day in the accounting trade (even if they aren’t the foremost expert).

      When I found a new CPA recently, I simply opened up a conversation with them, and they asked me to send them my YTD financials and most recent tax return. This gave them a chance to see the full picture and then make suggestions on how I could take advantage of new opportunities to save money on taxes. This quickly made it evident that tax breaks were being left on the table with my current accountant, and the new CPA office would be able to immediately bring some value to the table.

  13. I agree that finding out how an accountant charges you would be really helpful. It would be smart to do this because it would ensure that they will do a good job as well. My brother is looking for an accountant to help get his taxes done before April, so he’ll have to find someone who doesn’t charge you too much but provides a good service.

    1. Thanks for sharing your thoughts Hannah! Best of luck to your brother.

    2. Thanks for sharing your thoughts Hannah!

  14. Jordan says:

    We’ve been looking for a good general bookkeeping service, and I think that being able to get some tips would be nice. I like that you talked about how you want to set the right expectations with a bookkeeper, and how you want to know who will be handling things. I’m going to have to look for a few good general bookkeeping services and see what we can find!

    1. Thanks Jordan! I’m glad you found it helpful.

  15. Austin Hendrickson says:

    As a CPA who invests and specialize in real estate this article is great. Make sure your CPA specializes in real estate and is knowledgeable of real estate investing. If you have a heart problem you would not go to a brain surgeon, so if you have a real estate business do not just go to a general CPA. As far as the fees go you usually get what you pay for. I have seen way too many investors that went with a CPA friend or smaller accountant and although they save a few hundred bucks a year I usually find a mistake or two that costs them thousands of dollars.

    1. Thanks Austin! Those are some sage words of advice. Thanks for sharing!

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