Doing it without an accountant?

[sjkpark]

Is anybody managing their property without an accountant? Especially those with small portfolios of 1-2 properties?

Serena

[olliestyles]

Suggest you think about using an accountant as they can advise on your whole situation and suggest the most advantageous ways of structuring your affairs.

However maintaining and balancing a cashbook to your bank statement is not hard and will help save you fees if you do it properly, and maintain good records (ie keep all invoices nicely bundled together in date order (ie by month). Also provide all bank statements for the year and the statements for your loan(s) that relate to the property. When they have to start asking for records that's when the clock starts winding up.

[Rosco]

What entities do you own your properties in?

1) A Trust, Company or LP will be more complicated and probably require an accountant. I see a few people do their own companies and Trusts, but general not too well. The main thing people normally get wrong with Companies and Trusts is keeping track of their current account (money introduced less taken out as drawings), and keeping track of the retained earnings/Imputation credits (tax credits)

2) For a sole trader or partnership, the accounts are a lot simplier and easier for normal investors to complete


For any entity, an alternative is to complete the work and tax returns yourself, then get an accountant to review it. It might cost $100 to $200 as a guideline for simple/small entities. This is a great way to pick up on mistakes, plus items you may be missing.

Ross

[Perry]

Search out some good software. Preferably
a program that many accountants have,
use, or can interface with, one way or another.
A journal print out, along with what Ross
suggests (in his last paragraph) is another
potentially helpful option.
.

[whitt]

rentmaster etc has some good products which will simplify accounting and investing

[Jumpin]

If you own 1 or 2 properties and do a bit of homework with IRD, I am sure an averagely smart person could do their own accounting, particularly if hey use a recognised package like MYOB. In theory a good accountant could save you more but you will pay more in fees than you save in tax. A well paid accountant hasn't got time to go through your accounts thoroughly apart from checking the obvious, so is unlikely to improve on your own version anyhow.

[sjkpark]

Thanks for all your replies!
I thought about going alone next year after 1st April, but now I'm thinking about filing one myself this year.
Jumpin I notice that you are in Hutt City. I work at Hutt once a week on Monday. Would you be able to impart some knowledge for coffee/lunch some day about accounting and property in general?

S

[Jumpin]

Thanks for all your replies!
I thought about going alone next year after 1st April, but now I'm thinking about filing one myself this year.
Jumpin I notice that you are in Hutt City. I work at Hutt once a week on Monday. Would you be able to impart some knowledge for coffee/lunch some day about accounting and property in general?

S

Coffee Monday sounds good. PM me where and when,

regards
Tim

[Perry]

Great offer / stuff! Good to see the networking
properties of the PropertyTalk Forums working!
.

[artemis]

I do tax returns for my places (8 of them). I did use an accountant for a few years but have done my own for last 6 or 7 years. I'm a sole trader. The big plus in doing one's own is understanding exactly what's going on with the properties. I didn't really get that when an accountant was involved. I would suggest reading the IRD booklets on Rental Income and Depreciation, and studying the IR3R form line by line. Set up record keeping using the categories you need for tax (can have a second lot of categories as well if you want). Ask questions here if not sure on anything. I found Peter Sibbald's book Slash Your Taxes Now helpful too. Not sure if it is still available, he got into a spot of bother a couple of years ago and ended up in jail. Last time I checked the new Depreciation booklet was available online but not in paper copy.

[olliestyles]

while software packages are nice...a cashbook is free and simple and for a rental, basically rent in and interest, rates and maintenance out, you don't need software. it just has to balance and if you dont mix personal stuff in there...its way too easy to consider forking out for software.

[whitt]

while software packages are nice...a cashbook is free and simple and for a rental, basically rent in and interest, rates and maintenance out, you don't need software. it just has to balance and if you dont mix personal stuff in there...its way too easy to consider forking out for software.

however for a minimal outlay a software package saves you dozens of hours come tax time

[CJ]

however for a minimal outlay a software package saves you dozens of hours come tax time

Not necessarily. I have a spreadsheet that is all set up and other than entering transactions, can be rolled over to the next year in less than an hour, including account preparatin.

The only advantage is if it automatically inputs transactions like Xero. I find even the work for something like MSMoney is about the same for manually entering transations if there are very few.

[ChrisD]

I agree - in my view software is a pointless outlay for someone with only a few (e.g. fewer than 5) properties.

[whitt]

You can always try a trial such as this and see if it meets your requirements:

http://www.rentmaster.co.nz/default.aspx