Why landlords should have an accountant

Whether managing a single property or a vast portfolio, landlords must navigate a complex web of financial tasks and obligations.

These include monitoring tax laws, managing rental income, tracking expenses and strategic financial planning.

Harnessing the skills and experience of professional accountants presents opportunities to save money, plan growth and maximise tax savings.
Read on to learn more about how accountants are perfectly poised to support landlords.

Landlord responsibilities and how accountants can help

Landlord responsibilities are already complex, and you have to look after your rental income and expenses on top of that. Accountants can ease the burden, helping slash tax bills in the process.

Financial planning and oversight

Accountants help landlords manage various expenses associated with property ownership, including routine costs like maintenance, unexpected repairs and renovations.

They can also assist with financial commitments such as mortgage payments, insurance premiums and local council taxes.

Rent collection and cash flow

A landlord’s primary focus is maintaining a steady cash flow, largely dependent on consistent rent collection.

Accountants track rent payments, manage receivables, and promptly identify late or missing payments. This ensures landlords have a regular income stream to cover their expenses.

Tax management

Accountants guide landlords through various taxes, such as income tax or corporation tax, capital gains tax, and stamp duty, all of which can apply to buying, renting and selling rental properties.

  • Capital Gains Tax (CGT): Accountants can help landlords understand the implications of CGT on the profit made from selling a rental property, including exemptions and allowances that may apply.
  • Stamp Duty Land Tax (SDLT): Accountants can advise landlords on the stamp duty costs associated with purchasing rental properties, helping you navigate SDLT rules and exemptions.
  • Corporation Tax: For landlords who operate as limited companies, accountants can assist in managing corporation tax obligations, including deductions and reliefs available for rental income.
  • Income Tax: Accountants can help landlords optimise their tax liabilities by providing guidance on how rental income should be reported and any allowable expenses or deductions that can reduce tax liability.
  • Inheritance Tax: Accountants can also provide advice on minimising inheritance tax liabilities when passing rental properties to heirs or beneficiaries as part of estate planning.

Accountants, by profession, stay ahead of tax laws and regulations, saving you time keeping track of your duties.

Investment analysis and strategic planning

Accountants can help you analyse the potential returns and risks of property investments. They conduct thorough financial analysis, considering market trends, rental yields and property appreciation rates. This is invaluable for anyone seeking to expand or shrink their portfolio.

Skilled in finance, accountants can additionally advise on mortgage products and structures and help landlords find the most cost-effective borrowing strategies.
This includes analysing interest rates, repayment terms and the impact of mortgage expenses on overall investment returns.

Expense tracking and management

Tracking expenses is absolutely pivotal to making the correct deductions from your tax return.

  1. Systematic recording of expenses: Accountants meticulously track and record all expenses associated with property management. This includes routine maintenance costs, repair expenses, insurance premiums, property taxes, and management fees. Accurate expense tracking is vital for effective budgeting and financial reporting.
  2. Tax deduction optimisation: By identifying allowable deductions specific to property management, accountants ensure landlords maximise their tax efficiency. This includes advising on deductible expenses such as mortgage interest, maintenance costs, and other allowable expenses under tax laws.
  3. Budget management and cost control: Accountants assist in creating and managing budgets for property maintenance and upgrades. They provide insights on cost-effective practices, helping landlords control expenses without compromising on the quality of property upkeep.
  4. Regular financial reporting and analysis: Accountants prepare financial reports, including profit and loss statements and cash flow analyses. These reports offer landlords a detailed view of their financial performance, helping them identify areas for cost savings or additional investment.

Summing up

Accountants play a multifaceted and invaluable role in a landlord’s financial journey. They support tax efficiency, compliance, strategic investment and overall financial management.

Whether you’re revamping your expense tracking tasks or planning to grow or sell your portfolio, accountants can help you deliver on objectives, maintain compliance and save money.

Pearson May offer a full suite of services designed to support landlords. Contact us today to find out how we can help you.

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