Accounting for real estate is a field that has potential in every era, and it keeps growing. Real estate accounting has so much to offer, whether you are just a beginner, an expert, or from another field looking for something new to step into.  

Property management involves vast amounts of money, risks, and profits. Therefore, managing real estate matters is not an easy task. That’s where a real estate accountant comes. It maintains a check and balance on your real estate properties whether they are an asset for you and your business, have started depreciating and became liability, and other real estate services.  

Who uses accounting for real estate? 

• Owner of a real estate agency 
• Property manager  
• Maintainer of housing association accounts 
• Manager of a construction company 
• Manager of an investment trust 

Accounting for real estate in businesses or firms 

For businesses, it is essential to hire a real estate accountant. Even when you’re dealing with real estate, you need to consult with a real estate accountant to get to know more about the property and the risks and rewards associated with it. As for the businesses, there’s always competition. Accounting for real estate will always help get ahead of the market competition and improve business. It includes:  

• Managing the business to spend intelligently to expand or shrink the business 
• Evaluating the pros and cons of an expansion or contraction 
• Understanding real estate income, rewards and risks 

• Preparing the business for yearly property taxes and financial audits 
• Managing real estate for clients, construction company or housing association  

What benefits can real estate accounting provide? 

• Can improve cash flow, speedy and efficient as possible 
• Can control income and expenses coming from property 

• Can do routine checks of property value and performance 
• Can keep up with legal protection, so you don’t fall into frauds 
• Can keep up with tax and audits 
• Can compare and find underperforming properties  

Why do real estate agents need accounting? 

Real estate agents require effective accounting procedures because it gives them the: 

• ability to gain high-level perspective of your personal financial situation 
• Business growth insight from year-to-year 
• opportunity to manage your cash flow and watch for potential red flags 
• streamlined process for generating yearly tax returns 

• overall outgoing expenses in order to make payments on time 

The roles and responsibilities of a real estate accountant  

The main goal is to ensure you have a good income and a dependable system for taxes, profits, and risks. There are many complexities that come with accounting for real estate, and anyone can easily get caught up with complexities. A good real estate accountant makes sure that there are no complexities remaining and paints a perfect picture for you to understand and make your decision accordingly. 

There are certain methods that help with the type of accounting for real estate you are dealing with. Real estate accounting can also be automated thanks to all the technological advancements there are. Applications and software such as; AppFolio, FreshBooks, and Landlord studio provide these services too. 

You might confuse accounting with bookkeeping, but bookkeeping is more about invoicing and payments, whereas accounting has more to do with preparing for tax time and understanding your gains, losses, and profits, managing money to maximise profits, meeting tax due dates, meeting all tax collection requirements and other business regulation, and performing financial analysis and audits.