Do I need a CPA? ANSWER INSIDE

[Account Closed]

As your income and real estate portfolio grow, reaching the $150,000 marks in my opinion the beginning of your financial journey into real estate. It's at this juncture where you likely have around 20-40k saved up, and you’re ready to buy that first rental or maybe you even already have one. Hiring a real estate-focused accountant for tax preparation and advisory services becomes not just beneficial but crucial here. Up until this point, when your income was lower and you were following a more “vanilla” financial strategy, the need for a specialized accountant might not have been apparent. However, as you move into a higher income bracket and acquire rental property, the complexities of tax planning and financial strategy escalate, making the expertise of a skilled accountant invaluable.

A real estate-focused accountant brings a nuanced understanding of the tax implications and intricacies specific to the real estate industry. Beyond preparing your taxes, they can provide insightful advice on optimizing your financial structure, identifying potential deductions, and strategizing for future investments. This phase in your financial journey is akin to setting up the foundation of a building; a solid foundation ensures stability and growth. The same principle applies to your finances, and a knowledgeable accountant can be the architect of that foundation. Moreover, by collaborating with an accountant who works with investors at various stages of their journey, you not only gain access to their expertise but also tap into a wealth of collective knowledge. It's like having free mentoring embedded in your financial team, as they share insights from working with individuals both earlier and farther along in their real estate endeavors. This symbiotic relationship can prove invaluable as you navigate the complexities of real estate taxation and financial planning, ultimately propelling you towards greater financial success. This is why when people ask “Should I get an accountant” on the bigger pockets forum I usually answer 9/10 times yes. Often times people are already far along their journey and have made mistakes they could have avoided simply by working with the right tax pro.

[Kevin S.]

Does the 'specialized accountant' have to be within the state due to applicable RE state laws (if any) as it pertains to each state?

Do clients with 'regular' accountants now retain 2 accountants or switch regular accounting to the specialized accountant(under one roof)?  Why and why not?  Pros and cons. Challenges and benefits of each option. 

Investors and accountants, please chip in.  Thanks.