While many investors equip themselves with sound education to prepare for their property investment journey, some of the best investors are not afraid to seek out help and build a trustworthy financial team to achieve their ultimate goal of financial freedom and stability.
One of the most crucial members of an effective financial team is the accountant, that is why an investor must consider several factors to make the best choice.
Buyer's agent Paul Glossop joined Smart Property Investment's Phil Tarrant to identify the qualities of a good accountant:
1. Don’t look for a “Jack of All Trades”
While your accountant needs to be good at what he does, you should not expect him to be good at everything that needs to be done for you.
According to Mr Glossop: “You want people to be specialised in what they specialise in. If someone wants to be a Jack of all, typically, they are a master of none, and that’s a problem.”
2. Trust someone who understands your long-term goals
In order to build a good financial team, an investor must know his goals and the ways with which he wants to achieve it. When you know yourself, it follows that you know just who you are looking for to join you in your property investment journey.
“Know who you are and build a team that’s going complement who you operate normally and naturally,” Mr Neary explained.
Mr Tarrant added: “Be more in tune with your own personal dynamics. There are internal prejudices or dialogue that you have which stop you from making the decisions that you need to make ... Building a team around you means looking to find the right people to provide you with advice.”
For Mr Glossop, a good accountant is someone who is not always willing to take care of the teachinicalities for you, but also one who understands your motivations and your long-term goals.
“Yes, he can do all the other stuff, all the compliance stuff, the nuts and bolts stuff and tax returns. But for me, he should also be invested in my long-term goals in wealth creation through property. I think that’s probably a fundamental thing with an accountant. If you can’t feel confident enough to have those conversations with your accountant, that’s probably not the right accountant to have,” he said.
3. Let your emotions take a backseat
A good accountant is someone who can be completely honest with you so he can give the best advice that can move you forward in your investment journey.
Glossop shared: “I sat down with my accountant earlier this week ... I’m running the numbers every other week and I know what I can do, but I don’t know really if it’s going to be the best aspect for me to go down, given what my end goals are. For me, it’s sort of saying, ‘Look, I know property inside and out, but what I don’t really know as well as I could is structuring and when I should and shouldn’t pull the trigger.’ That’s what I want someone else to just tell me how it is. Care about my outcome, but don’t care about my emotions. I want someone to tell me how it is,” he added.
It must also be noted that a reliable accountant could not be recommending properties. Instead, he should only work to challenge your choices and make sure that you’re going for the best option.
According to Glossop, “An accountant probably shouldn’t be recommending individual properties. I look at the relationship I have with my accountant—I’ll let him know what I’m looking at buying and he’ll stress test or challenge the purchase based on our long-term goals and aspirations in property.
4. Try to look for the best – literally
One of the obvious but most important steps in choosing an accountant is checking his background and credentials. After all, aside from getting assistance in transactions, you are looking to learn from his experiences in the field.
Mr Tarrant works with an accountant who has been a property investor for more than a decade, making him the perfect person to run to not just for technical help, but more importantly, for expert advice.
“He lives and breathes property. He’s technically a very competent and capable accountant ... He’s one of the best in the business. I trust his insights. I trust his knowledge and expertise because he’s got a lot of experience. He’s been there with skin in the game himself,” he said.
5. Dont' be afraid to ask, “How much?”
Knowing how much an accountant will charge can help you manage your expectations, Mr Tarrant said.
He tells investors: “Find out how much they’re going to be charging you and why they’re going to be charging you that much ... What is the breadth or depth of their service? You need to set expectations really early on about what your accountant can do for you.”
The SPI host added: “His services could be as simple as sending invoices for the year and just quickly doing your accounts towards it, then you can maintain or manage your compliance in terms of tax. But other accountants can go all the way through the other end, and be your eyes and ears, and guidance mentor to help develop and structure a portfolio which is going to provide in wealth creation.”
6. Shop around
Chances are you don’t always meet your perfect match on the first date. The same probability applies in building your financial team, so don’t be afraid to speak with different experts until you find the ones you’re most comfortable with.
“It’s got to be an open relationship. You need to be comfortable and the dialogue needs to be easy to have. You’ve got to be happy in the way in which they communicate with you. Some accountants might just want to talk on the phone. Some accountants might want to have monthly meetings. Some accountants might want to communicate via SMS. All those little things need to be in a position which makes you comfortable to communicate with them to get the absolute best out of the relationship,” Mr Tarrant explained.
At the end of the day, building a financial team will always be about finding the people who understand your end game and are willing to do the best they could to help you achieve your goals.
You would know that an accountant is the right one for you when you can trust that they only have your best interests at heart, and you can confidently accept their advice knowing that they work hard to improve your portfolio and make the best out of your investment journey.
Tune in to The Smart Property Investment Show’s Q&A session to find out the answers to some of the most frequently asked questions about property investment.