I’ve got two investment properties, and I’ve (thankfully) kept good records since buying them both. I’m actively saving for a deposit on a third property and I’m making cuts to spending wherever possible. Do you think I can get by without an accountant?
It depends. I’m not sure what your background is. How much do you know about accounting, financial reporting, tax law, PAYG withholding, GST and capital gains tax? Do you know exactly what you can claim? What you must declare? Do you know the deadlines, the reporting requirements, the forms and evidence you need to file? How much time would you need to spend researching this if you don’t use an accountant? How confident would you be that you have it right come tax time?
For most property investors, having a quality team is itself an investment – every dollar pays for itself and more.
For example, I met someone who had recently been made redundant, so they took on their own property management, record-keeping and accounting to “save” money. Soon after they got rid of the Property Manager, their fabulous tenants moved out. The new tenants caused a lot of damage, and didn’t pay rent while the place was repaired. They paid some back-rent when the repairs were done, but not much. When they caused more damage, they were asked to leave. The landlord kept the bond, and this just covered the deductible on the insurance. Think about what you would do in this situation. You’d probably know that you can claim the repairs to offset income. Would you know, though, that you must declare the insurance pay-out as income? That you must also declare the bond as income?
Depending on how much you already know, how much you are willing to learn and how much time you have on your hands, you may make some economies by doing your own accounting. Most of us, though, really benefit from having a qualified, trusted professional looking after our interests. Feel free to talk to us about your individual situation – we may be able to find an option that suits both your needs and budget.