Should You Hire A CPA When House Hacking?

I’ll start this post off by saying that I’m not a CPA or tax accountant and nothing in this post is financial advice. Make sure you do proper research on your situation and most importantly, don’t sue me bro…

The short answer is yes, you should hire a CPA when housing hacking. However, the long answer is that this question depends on the quality of CPAs (certified public accountants) in your area.

For example, in my area, a big portion of CPAs don’t want to work with a landlord who only owns 1 property (the property you’re house hacking). They prefer to work with landlords who own multiple properties because it’s more profitable for them. So, if you happen to live in an area like mine – there may not be many CPAs willing to work with you.

However, if you live in an area where CPAs are interested in working with property owners who only own 1 property – I’d recommend hiring a CPA for at least your first 1-2 years of house hacking. This will allow you to build a solid foundation (with the CPA’s assistance) and give you an understanding of the accounting process, should you decide to start managing things on your own.

But keep in mind, you may need multiple CPAs depending on what you’re trying to accomplish.

For example, some CPAs may focus specifically on tax preparation (filing taxes) while others may focus on tax planning (the strategy). So, depending on the type of CPAs you talk with – you may want to hire multiple CPAs for different reasons and experience both the tax planning and tax preparation process to get an understanding of what needs to be done.

Recommended Reading: House Hacking Guide

Questions To Ask A CPA When House Hacking

• Are you experienced with real estate investment strategies such as house hacking or owning rental property?
• Do you specialize in tax planning and/or tax preparation?
• What deductions are available to me while house hacking?
• What percentage of expenses are deductible? This will be different depending on if your house hacking a single-family, house hacking a duplex, or house hacking something else (learn more about the different types of house hacking here).
• How do I go about depreciating my house hack?
• Is there anything you recommend I do that you’ve seen work well in your experience or from your previous clients?
• Is an excel spreadsheet enough for bookkeeping or would you recommend something more advanced?
• How long should I save receipts?
• Is there a preferred or recommended method for storing receipts long-term other than saving them in a folder?
• Is there anything in the IRC (Internal Revenue Code) that I should consider when house hacking that could affect me in the future? For example, being aware of any personal use limits that may exist.

What To Do If You Don’t Hire A CPA

In this guide for self-managing your rental property, I talk about keeping a log of all of your expenses as a bare minimum form of bookkeeping. If you’re able to do that in a spreadsheet like Google Sheets, software like Stessa, or something heavy-duty like Quickbooks – you can probably make it through the year without having a CPA.

You will want to learn as much as you can about what limits and deductions are applicable to you as a rental property owner. However, come tax time, using tax software like TurboTax will help guide you through the entire tax filing process. I’ve done this for several years and, even though my wife is a CPA, it’s been simple enough that I don’t have to use her valuable freelance time for filing (those consultation dinners and nail appointment meetings add up).

Frequently Asked Questions