Bought My First Property - When to Bring in CPA?

[Tanya Hurst]

Bought my first investment property in August 2023. We've been working hard to get it ready to be listed as STR. I've been reading and listening to as much information as I can find. I feel confident, but nervous at the same time. At what point should I start talking to CPA's to get a tax strategy started? My goal is to puchase additional STR's. If now, does anyone have any recommendations?

[Sean O'Keefe]

For most of us, we appreciate clients bringing us in early before they've made any major decisions (like setting up an LLC, placing property in service, or selecting bookkeeping software). This gives us the opportunity to help them avoid mistakes that are messy and expensive to resolve. That being said, there is already a lot for new real estate investors to deal with when they buy their first property so CPA isn't necessarily top of the list of things to get done. I understand :)

Some mistakes to avoid or chat to CPA about
For example, a common question is "Should I get LLC or not?". Generally, when you initially set up the LLC it doesn't have any credit history and as a result, lenders won't lend to you if they do the rates will be higher because it's a commercial loan (and the LLC has no credit history). If you plan this out before setting up LLC you may be able to avoid having an LLC that you can't benefit from because it doesn't own the investment property.

Also, a dedicated business bank account to avoid co-mingling personal and rental property funds - very messy to untangle at the end of the year after several months have gone by and you forgot what expenses / income was personal vs. business.