Property Investment
4 min read
Author: Tina List
Tina List, Client Relationship Manager and property investor
Reviewed by: Marc Lemaire-Sicre
Chartered accountant, specialising in investment property structure and accounting.
As a property investor, you might wonder: “Do I really need to use an accountant, or should I just do my own taxes?”
It’s a common question, and one investors often ask.
Because, on the one hand, it costs money to use an accountant. So not using one saves money. But then, managing your investment property’s finances can be tricky, especially the tax.
So, is it worth paying for an accountant or should you go the DIY route?
Before we get into this article, it’s important to mention that our company (Opes) also has Opes Accounting. We help property investors run their taxes.
So you might think: “They’re biased! They’re just going to tell me to use an accountant, and that I should use them.”
I’m not going to do that. My approach is simple: I will outline the pros and cons of using an accountant as unbiased as I can. Then, I’ll take a step back and let you make the decision. That way you can decide what’s best for you.
An accountant can save you time when it comes to filing your taxes with the IRD. Many property investors forget they are business owners.
They are in the business of providing rental accommodation, so you need to file a tax return with the IRD. This takes time and head space if you do it yourself.
On top of this your accountant should help you minimise your tax by catching all the little deductions many investors miss.
If you own multiple properties, or hold assets in complex structures like trusts, this expertise can be invaluable.
But there are cons too. It costs money to use a property accountant, so investors with simpler or smaller portfolios might think the cost outweighs the benefit.
Finally, not all accountants have equal experience in property ... if any. So, choosing the right one is crucial to avoid errors, missed deductions, or even financial penalties.
More from Opes:
Your accountant won’t usually advise you on whether to buy a property ... or not.
But, they will often guide you on how to buy (and own) your properties.
For example, should you buy a property in your own name, through a trust, or even in a company?
They’ll help you save on tax by factoring in all your costs (e.g. chattel depreciation).
And they’ll then file your taxes with the IRD and run all your numbers. That saves on stress and means you don’t get an unexpected knock on the door from the tax inspector.
It’s helpful for property investors to use a specialised accountant. Any accountant can file a tax return, but a property accountant brings special knowledge.
They break down the details more thoroughly, helping you navigate:
Accounting costs vary based on how complex your needs are.
Initial consultations are usually free, but ongoing services typically start around $1,200+GST annually.
For example, at Opes Accounting our flat-rate model is:
While using an accountant comes at a cost, many investors find the tax savings pay for the accountant. Plus, you get the peace of mind that comes with professional help.
Now, not everyone needs an accountant.
If you have never filed a tax return before … then you should probably use an accountant. This is to make sure you’re claiming correctly and avoiding costly mistakes.
It’s the same story if you have a few properties or own those properties in a complex structure (e.g. a trust or company). In that case, it’s often better to use an accountant.
But, if you have experience filing tax returns and own just a single property .... managing the taxes yourself could work, particularly if you own it in your own name.
If you’re a book-keeper and you use Xero at work all day, then doing your own tax can make sense. And if you’ve got a background in tax or accounting, you probably don’t need another accountant’s help.
Ultimately, you don’t have to use a property accountant. That choice – whether you work with an accountant or DIY – comes down to you.
For some, an accountant brings peace of mind. They help avoid mistakes and point out potential savings, the sort that might otherwise go unnoticed.
But, if you have a simpler portfolio or a background in tax, the DIY method could save you money. Remember, your approach can evolve as your investment portfolio grows.
DIY may work if you have the skills but, as you buy more properties, an accountant becomes more important.
Whatever your choice, you’ll need to stay informed and proactive. That’s how you achieve long-term success in property investment.
Tina List, Client Relationship Manager and property investor
Tina List is a Client Relationship Manager with a Financial Adviser qualification. As a property investor herself in New Zealand, Tina brings firsthand experience to her clients. Originally from South Africa, she has a background in the Finance and Insurance industry.
