While there are definitely many exceptional accountants in Australia, property investors who are looking into building their financial team must find accounting experts who have an "intimate understanding of property investment," according to Smart Property Investment's Phil Tarrant.
Most accountants are undeniably technically skilled, but property accountants must be able to understand the vast and complex landscape of property investment—from the perspective of both investor and tenant.
"There are some exceptional accountants who are focused, who have a particular specialisation or lean towards property investments... They (should) have an intimate understanding of property investment and how it works and the upside for tenants, someone who's pro-property in particular," Phil said.
Momentum Wealth's managing director Damian Collins added: "The amount of legislation you have to get to be a general accountant is just incredible. Bank accountants have to be across business tax, GST, income tax, the whole raft of things... Ultimately, your best bet is rather than go with a generalist, if you really want to focus on property, find an accountant who does specialise in property."
According to Phil and Damien, having an accountant who is familiar with property investment will not only be helpful in certain transactions, but will also offer good guidance in terms of navigating your way through your investment journey.
"It's not absolutely essential, but I'd probably make sure that your accountant is also a property investor, so they know what it's like to be in the trenches because a lot of accountants aren't, you know... To give you an idea of my accountant: I was down in Canberra for the Budget early in May, and I was on the phone the next day to my accountant because I got all the depreciation information firsthand and I went, 'Hang on a second, what's this all mean for me?' I spoke to him the next day, and he was right across it—he knew exactly what was going on even though it was still very grey at the time... He makes it his business to know what's going on and that's the value in your relationship," Phil said.
Lastly, investors must find property accountants who they can build a relationship with and comfortably share their financial situation and aspirations.
Phil explained: "It's got to be a good relationship. You got to like each other. It's a very personal relationship with an accountant, you need to want to show them all your financial situation even if it's not the best in the world, and they should be able to work with you on that. If you're not comfortable with the person that you are dealing with, find someone else."
As in finding the right property manager or insurance company, referrals and advice from field experts and professionals could also help in choosing the perfect accountant for a property investor.
Investors must also make sure to ask the right questions to make sure that they employ the accountant that would fit perfectly in their investment journey.
"If you're using a buyer’s agent, they would most likely know a good property accountant. Your mortgage broker, they should know if they're specialising in property investors and they should be aware of who the good accountants are. I'd be tapping into your own referral network, asking the accountant, 'What's your experience with property investment?' or 'What percentage of their clients are property investors?' Just making sure that they've got the expertise to know what's going on," Damian said.
He added: "There's so much legislation and change out there... We've just seen the recent changes to depreciation and other things. If you're a general accountant, there's a whole lot of other changes as well. Unless they specialise in property, they may not be crossing everything. Ask the questions. Ask your referral network. And then ask the accountant directly."
As a final reminder, both Phil and Damian agreed that, at the end of the day, investors get what they pay for.
"Find someone who's going to give you the best advice and not just go for the cheapest," Damien said.
Tune in to The Smart Property Investment Show's Q&A session to know more about how investors can prepare themselves in the face of interest rate hikes, how buyers can find the right products to suit their needs, and more advice on some of the most common concerns of property investors.