Is My Real Estate Bookkeeper REALLY Qualified? 5 Questions You MUST Ask

• Start with a relatable scenario: A real estate investor wakes up in a cold sweat, realizing they don’t really know if their bookkeeper is truly qualified to handle the complexities of their business. Emphasize the financial risks associated with unqualified bookkeepers in real estate.
• The Stakes are High: Why Real Estate Bookkeeping Demands Expertise:

 Explain that real estate bookkeeping and accounting is NOT the same as general business bookkeeping. Highlight the unique challenges:

• Trust Accounting & Escrow Management: Legal and ethical obligations. Consequences of mishandling funds.
• Property Depreciation & Cost Segregation: Tax implications and complexities.
• Multi-Entity Accounting (LLCs, Partnerships, etc.): Consolidation and reporting requirements.
• Property Management Software Integration: Ensuring data accuracy and efficiency.
• 1031 Exchanges: Proper handling and documentation.
• 5 Crucial Questions to Ask Your Bookkeeper (or Before You Hire):

1. “Do you have specific experience with REAL ESTATE bookkeeping? How many years? For what types of real estate businesses (single-family rentals, commercial properties, etc.)?”
   • Why it Matters: General bookkeeping experience isn’t enough. You need someone familiar with the nuances of the industry. Look for specific examples of their experience.
2. “What accounting software are you proficient in? (QuickBooks Online, Xero, Buildium, AppFolio, Yardi…)”
   • Why it Matters: Proficiency in real estate-specific or cloud-based accounting software is essential. Ask about certifications or training they’ve completed. Inquire about their process for integration.
3. “Are you familiar with the unique tax considerations for real estate, such as depreciation, 1031 exchanges, and property taxes?”
   • Why it Matters: Tax planning is crucial for real estate businesses. A qualified bookkeeper should be able to help you identify potential tax savings.
4. “Can you provide references from other real estate clients?”
   • Why it Matters: References provide valuable insights into their skills, reliability, and communication style. Don’t hesitate to contact the references.
5. “Do you have any relevant certifications or credentials (e.g., Certified Bookkeeper, QuickBooks ProAdvisor)?”
   • Why it Matters: Certifications demonstrate a commitment to professional development and adherence to industry standards.

Red Flags: Warning Signs Your Bookkeeper Might Be In Over Their Head:

• They can’t clearly answer your questions.
• They are hesitant to provide references.
• They don’t use or understand real estate-specific accounting software.
• They seem unfamiliar with common real estate tax issues.
• Their fees seem suspiciously low.

• Velan Bookkeeping Services Commitment to Expertise: This is where you subtly introduce your company and its qualifications. Focus on:
  • Experienced team with specialized real estate knowledge.
  • Certified bookkeepers and QuickBooks ProAdvisors.
  • Client testimonials (brief, impactful quotes).
  • Clear communication and proactive problem-solving.
  • Commitment to staying up-to-date with industry changes.
• Don’t Gamble with Your Finances: Invest in Qualified Bookkeeping: Reiterate the importance of hiring a qualified bookkeeper and the peace of mind it provides.

Why This Approach is Effective:

• Addresses a Real Concern: It directly tackles the fear that many real estate professionals have – whether their bookkeeper is truly competent.
• Establishes Authority: By providing insightful questions and warning signs, you position yourself as an expert in the field.
• Builds Trust: You’re not just selling your services; you’re educating your audience and helping them make informed decisions.
• Subtle Promotion: You integrate your company’s qualifications naturally within the context of the article.
• Actionable Advice: Readers can immediately use the questions and red flags to evaluate their current (or potential) bookkeeper.

1. What is real estate bookkeeping, and why is it different from regular bookkeeping?

• Real estate bookkeeping services involve managing the financial records specifically for real estate businesses, considering unique aspects like property depreciation, rental income, trust accounting, 1031 exchanges, and property-specific expenses. It differs from general bookkeeping because it requires specialized knowledge of real estate tax laws, property management regulations, and industry-specific accounting practices. A general bookkeeper might not understand how to properly handle depreciation recapture, whereas a real estate bookkeeper will know exactly what to do.

• 2. What types of real estate businesses do you serve?
  • We serve a wide range of real estate businesses, including:
    • Residential and commercial property investors
    • Landlords with single-family and multi-family properties
    • Property management companies
    • Real estate agents and brokers (independent contractors and agencies)
    • Real estate developers
    • REITs (Real Estate Investment Trusts)
    • Fix-and-flip businesses
• 3:What accounting software do you work with?
  • A3: We are proficient in a variety of accounting software popular in the real estate industry, including:
    • QuickBooks Online (QBO)
    • Xero
    • Buildium
    • AppFolio
    • Yardi Breeze (and other Yardi products)
    • We can also adapt to other platforms if needed. Our goal is to use the best software to suit your specific needs and budget.
• 4: Do you provide tax preparation services, or do you work with my existing CPA?
  • A4: While we primarily focus on bookkeeping, we can prepare the necessary financial statements for your CPA to efficiently handle your tax preparation. We strongly believe in collaboration and are happy to work closely with your existing CPA to ensure a seamless process. We can also recommend trusted CPAs with real estate expertise if you need one.
• 5: How much do your services cost?
  • A5: Our pricing varies depending on the size and complexity of your real estate business and the scope of services you require. We offer customized packages tailored to your specific needs. We provide a free consultation to assess your situation and provide you with a transparent and competitive quote. We offer fixed monthly fees where possible for budget predictability.