Regardless of the type of business you run, a robust financial framework and accounting system are central to your success. Without accurate financial data, business leaders are essentially guessing every time they make a major decision. A cohesive financial infrastructure is especially important for those in the real estate industry.
Owning, operating, and investing in real estate is a cash-intensive business. That’s true whether you actively invest in and manage short term rental properties or follow a more straightforward buy and hold strategy. You’ll have to pay for taxes, repairs, insurance, property management, and more. On top of that, the sums of money you’re dealing with when you acquire and sell properties can be huge figures. Accurately tracking your financial position and performance is crucial, but it’s only possible with the right approach to accounting and bookkeeping.
If you’re an investor that owns several properties, there’s a good chance you manage all of your accounting and finance needs yourself. Spending hours of your time on tasks that you don’t really have any expertise in is a huge burden, and if you’re honest with yourself, you know it’s not the best use of your time.
Fortunately, there’s a solution: outsourced accounting services. There are three levels to outsourced accounting: bookkeeping, controller services, and CFO services. We’ve already covered what’s involved in outsourced bookkeeping and outsourced CFO services.
In this guide, we’ll explore what an outsourced controller can do for real estate investors. We’ll summarize the accounting tasks you can delegate to an outsourced controller and share some of the benefits working with an outsourced controller can bring to your real estate business.
Controllers play an important role in all kinds of organizations––not just real estate businesses. These professionals tend to be qualified CPAs and are tasked with running the day-to-day financial operations of the business. They manage bookkeepers and work under the direction of the CFO.
An outsourced controller handles all of the same tasks as an in-house controller would. These tasks include:
There are several ways you can hire a controller for your real estate business.
The first option is the most obvious: hire a full-time controller to work exclusively for you. If you own dozens of properties, that might be a good fit, but for investors that are earlier in their real estate careers, the costs of this are often prohibitive.
Per Talent.com, the average annual salary of a real estate controller in the U.S. is $130,000. In addition to that, you have to deal with all the other complexities of a full-time employee: hiring, onboarding, training, benefits, and more. That’s a lot of work. Unless you have a sizable portfolio, the juice probably isn’t worth the squeeze.
An alternative approach is to outsource your controller needs to a real estate accounting firm. This option is becoming more and more popular with the real estate investor community due to the variety of benefits investors can realize from this approach.
The real estate industry is very different from other industries. That’s especially true when it comes to accounting and finance. Real estate is perhaps the most tax-advantaged asset class. But for investors to realize the true potential of investing in real estate, it’s vital they have an experienced real estate CPA in their corner.
Outsourcing the tasks that a controller would typically perform to a proven real estate accounting firm offers several advantages to investors. These include:
Whether you’re just starting out in real estate investing or have owned properties for years, you’ll be surprised at the potential value an outsourced real estate controller can unlock within your portfolio.
That only leaves one question: how do you get started with an outsourced controller?
As we’ve seen, outsourcing the accounting tasks that would typically be performed by an in-house controller can have huge benefits for your real estate investing activities. Looking to get started with the outsourcing process? You’re in the right place.
At Hall CPA, our specialized accountants work exclusively with real estate investors. Through a combination of advisory, outsourced accounting, and tax planning services, our team helps investors to reduce their tax burden and gain financial clarity.
Interested in learning more about outsourcing your accounting needs? Request a consultation today.