How To Choose A Red Hot Accountant For Property Investors
Judith says: If you are a Gold or Silver member of The Money Gym and you attended our “First Wednesday” webinar yesterday (or listened again) you will have heard one of our clients volunteering to let us know about a new, shit-hot accountant she had met who gave her a definitive list of what she could and could not deduct from her tax as a property investor. If you would like that man’s contact details, please contact me.
Our client is already a very successful professional property investor and she reminded me that this accountant works with one of the large property mentoring groups who have hundreds of clients and so he may be a busy man. Just a warning, for what that’s worth and also a reminder from me that if you are a pro in property like our client, then this is just the sort of guy you need.
However, my own accountant, who is by no means either an investor in property himself or an “expert” in this sort of thing, quickly, easily and cheaply munched up the financial reports provided to me by Passive Investments who are building my property portfolio for me and added in my own spreadsheet for my single BTL which I manage myself and was able to produce timely and accurate information for my tax return. Horses for courses.
So how do you choose an accountant who is right for you, your investments and your business? A few pointers from me and I speak as an ex-accountant.
You want an accountant who ….
……speaks your language and who responds in a timely fashion to your communications and with whom you feel totally at ease and in whom you trust. You don’t generally need a Rocket Scientist (and you certainly won’t speak her language!). Once we reach multi-millionairedom, the guy next door might no longer be “da man” for you, but meanwhile a local neighbourhood accountant will probably more than suffice as long as he/she meets your own criteria, see above.
In every accountants’ office in the land there are clients who invest in property so this sort of work is grist to their mill. We are not as rare a group as we might like to think, perfectly ordinary folk have been quietly investing in property since God was a lad and accountants are submitting their lettings accounts to the Inland Revenue. I know we had a large number of clients in my practice just quietly getting on with the business of being a landlord. (Note to self: How didnt I notice that at the time and follow suit?).
The important thing is to remember not to abdicate responsibility to your accountant, however much you like and trust them. Remember what happened to folks like Sting (was it Sting? ….yes, says Nicola and we had the same accountant while in the music biz!!) who then had to sue their accountants for misappropriation of funds when they were looking the other way. Pay attention to what they do and what they ask you to sign and if it doesnt feel right, then ask. Don’t let them just rubberstamp you and allow you to feel unimportant, go elsewhere for the relationship that enables you to feel respected and supported.
Please know that an accountant will take on “small” clients expecting them to grow into bigger clients and have a lifelong relationship with you, so in the early years you may be a loss leader for your accountant. And sometimes if you remain a loss leader, you can expect to be purged from their client list… in that event, I am probably your accountant’s business coach!
And finally, make and keep a list and provide receipts for all your expenses which you consider in any way - however remotely - relate to your business and income generating activities and present them at the year-end to your accountant and talk them through with them, explaining why you think they should be deductible and ask them to find a legal way to make it so. It’s often how they present your expenses and to do that in the best light they must understand your expenses first, and how incurred. However, if you push your accountant too far over their own grey line, they may also ask you to find another accountant. See how that relationship of trust works both ways?
Accountants want to have clients who are reasonably honest and act within the tax laws as guided by them, and it goes without saying that it is also their mission to save you from paying even one penny more in tax than you need to.
Enough already from me on this topic, its bringing it all back, I may need to go for a lie down!
Timely advice, Judith.
This is great information on how they tick, which will help us all communicate.
I have a specialist accountant for my medical work, as general practice business payments are so complicated. However, there is no reason why he will not be fine for my property and business work also. He is excellent.
Alisonx