Why Do Real Estate Investors Need a Bookkeeper?
As a real estate investor, the end of the year can be stressful with the pressure to get your financial statements in order. It doesn’t have to be that way — here’s how bookkeepers help.
Reasons to Hire a Bookkeeper:
- Tax compliance: The IRS requires you to file tax returns and provide financial information.
- Lending requirements: Banks may require up-to-date financial statements to approve loans or provide favorable interest rates when you refinance.
- Business performance: Regular financial review helps identify areas for improvement.
- Future planning: Accurate financial information helps you make informed decisions about investments.
- Investor/partner reporting: Partners may require regular financial statements.
What Is a Bookkeeper?
A bookkeeper is a professional responsible for maintaining financial records — including income and expenses — and ensuring records are accurate and up to date. They help with preparation and filing of taxes in compliance with all tax laws and regulations.
What Do Bookkeepers Do in Real Estate?
- Record keeping of all financial transactions
- Accounts payable and receivable management
- Bank reconciliation
- Budgeting and financial reporting
- Payroll processing
- Tax preparation and filing
- Auditing financial records
- Financial forecasting
- Financial analysis and recommendations
- Assistance with financial decision-making
Bookkeepers vs. Accountants
A bookkeeper keeps track of financial transactions, creates budgets, estimates future performance, and corrects errors. An accountant analyzes financial data and provides advice, including tax planning and compliance. Some professionals hold both certifications.
Software and Tools Bookkeepers Use
- Appfolio: Property management software for managing properties, tenants, and finances.
- QuickBooks Online: Popular accounting software for tracking expenses and creating reports.
- Buildium: Property management software with rent collection and accounting features.
- GSuite: For communication, collaboration, and scheduling.
Where to Hire a Remote Bookkeeper
Many real estate companies — including those in wholesaling, fix and flip, and BRRRR — are turning to overseas bookkeepers because it’s more cost-effective. You can find remote bookkeepers on Onlinejobs.ph, Upwork, and Fiverr.
A good bookkeeper works alongside your property management company to keep your rental expenses organized and your business financially healthy.
