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Rental Accounting

How to Find the Best CPA for Your Rental Business

Running a rental business is historically one of the most effective ways for individuals to grow their wealth. Rentals, managed well should generate positive cash flow while you build equity in an appreciating asset. It’s no mystery why the majority of millionaires have real estate in their investment portfolios.

On top of this, they offer property owners several very favorable tax advantages. However, managing your real estate business efficiently and making the most of these tax benefits is not always the easiest thing to do.

In fact, as your business grows, as you add more properties to your portfolio your books can quickly become overwhelming. The spreadsheet you were using for that first rental has grown enormous, or perhaps you are attempting to initiate a 1031 exchange or can’t work out how to adjust your property’s cost basis according to a recent large capital expense. The result is that you can no longer be certain that you are correctly tracking and accounting for all of your income and expenses.

Maybe then it’s time to consider finding and hiring a Certified Public Accountant (CPA).

But where do you find a qualified CPA for your rental business – and how do you know you’ve found a good one?

Why Would You Need a CPA?

An accountant is a professional who can help take care of all the detailed and essential math tasks that come with owning rental properties. They can help with your bookkeeping, expense categorizing, financial planning, tax filing, and more. What is more, they dedicate their time to ensure they are aware of all the specific local and federal legislation – legislation which can often change – potentially even annually.

A Certified Public Accountant (CPA) is an accountant who also meets the educational and experience requirements of the state they live in and has passed that state’s Uniform CPA Exam.

In other words, all CPAs are accountants but not all accountants are CPAs. And while a CPA can’t make business decisions for you, a CPA can not only help you handle essential financial tasks but offer advice to help you make the right decisions for your business.

  • Tax Advice and Planning – help your business save money on your taxes and plan for future tax situations (you’ll likely quickly see your money back from your investment in a CPA).
  • Audit and Assurance – Audit your tax returns to uncover and resolve any issues that might be of undue interest to the IRS.
  • Consulting – They can help you with budgeting, risk management, and preparing financial statements (this could be very helpful if you are looking for new loans or financing opportunities).
  • Bookkeeping – Help you keep accurate books and records and keep on top of invoices.
  • Payroll Administration – If you employ other individuals in the management or running of your rental business a CPA can help you manage your payroll and subsequent tax liability.

These are just a few of the services that a CPA might offer. As you can see they can help you with a lot more than just basic accounting tasks or the filing of your taxes.

finances and CPA

How to Find the Right CPA for Your Rental Business

Before you start looking you need to decide what services you’ll actually require of them. For example, will they just be managing your accounting or are you looking for someone to help you prepare for an audit?

Once you know what service you are looking for you can begin the search.

Search Online

Google is a great place to start your search. A simple search like “Real Estate CPA in [your location]” or “CPA for Rental Properties” should yield hundreds of results. You may want to adjust your search radius to specify CPAs closer to your location.

When searching online you want to make sure that the person you actually find is a Certified Public Accountant. (Eg. They have passed the test and are licensed by your state.) In addition to the CPA qualification test, CPAs must fulfill continuing education requirements to keep their license active.

If they’re going to prepare your taxes make sure they have a Preparer Tax Identification Number (PTIN).

Ask for Recommendations

Word of mouth is a good way to find a quality CPA. You can ask friends for suggestions or if they know of a good one. If none of your friends has real estate investments though you can turn to forums. There are plenty of groups on Facebook where you will be able to ask for recommendations. Or you can try a site like Bigger Pockets.

Online Directories

The final strategy for finding a quality CPA for your rentals is to look at the various online directories. Below we list 9 real estate directories you can try to find a quality CPA near you.

  1. CPA Directory: Over 500,000 CPAs are listed on this site. Read reviews and view the services each offer.
  2. CPA Finder: Search for accountants and CPAs by name or Zipcode.
  3. Accountants World Directory: Over 35,000 CPAs, accountants, and tax preparers listed. Search by service and industry expertise.
  4. AICPA Directory: AICPA has more than 431,000 members. You can find a CPA based on their location and area of expertise ion their directory.
  5. State Board of Accountancy Directory: Find accountants by state. This directory lists helpful links by state.
  6. Tax Buzz: Over 500,000 professionals listed on their site to help you find and connect with a quality local accounting professional with geo-location mapping.
  7. QuickBooks ProAdvisor Database: QuickBooks ProAdviser site has hundreds of thousands of QuickBooks certified accounting professionals on it.
  8. Xero Advisor Directory: This directory allows you to find a professional based on the company size, location, and experience level.
  9. Accounting Match: Search for a CPA or an accountant by their specialization or line of business.

Connect with Your CPA

Before handing over any money it’s a good idea to arrange a face-to-face meeting with the person who will be handling your finances. Ultimately, if thongs go wrong you are the one who will pay the price, as such you want to make sure you can trust them to be your CPA. If you can’t organize a face-to-face meeting, find someone else.

It’s a good idea to take someone along with you to these meetings, someone you trust and who can be completely unbiased. If they get a bad feeling, again, find someone else. There are plenty of CPAs out there for you to find the right fit for your rental business.

meeting your CPA

What to Ask When You Meet Your CPA for The First Time?

Once you’ve got the meeting lined up with a potential CPA you need to figure out what exactly you want to ask them. What do you need to know to judge whether they are a good fit for your business?

For example, you’ll want to ask them a few questions about their experience as a CPA, whether they have a specialty, and the size of their team.

Below we list a few key questions to get you started:

How Long Have You Been a CPA?

You want to find someone with years of experience so that you can have full confidence in their skills.

Who Will I Be Working With?

If they have numerous employees you may not be working with the person you are speaking to. Work out how big their firm is, the qualifications of the person you will actually be dealing with, and their preferred method of communication.

Are You Available All Year Round?

Some CPAs work as CPAs only during tax season, this is a side hustle rather than a full-time role. This might not seem like a big deal if you are only thinking of employing them to help you at tax time, however, if something comes up during the year you will likely want someone you can call to help deal with it.

Can You Represent Me in Front of The KRS?

Many CPAs are also Enrolled Agents, which means if you get into trouble with the IRS, they can represent you at hearings and speak for your business. Having someone experienced and knowledgeable on your side during an audit is definitely a bonus.

How Much Do You Charge?

You will want to specify which services you are looking to employ them in as this may change the overall price.

Final Words

Running your rental properties can be taxing (excuse the pun). However, with the right tools such as Landlord Studio, your bookkeeping can be made a thousand times easier, saving you both time and money.

Pair this with a great CPA and you will be able to run your rentals efficiently, maximizing your deductions, minimizing overheads, and staying organized.

Every hour you save managing your books is an hour you can spend improving your service to your tenants, and scaling your portfolio.

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Ben Luxon

Ben is an author and real estate enthusiast. His interest in all things entrepreneurial has led him to work with real estate professionals all over the world, distilling their knowledge into articles and Ebooks.

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