Learn Accounting?

Should anyone interested in real estate investment learn some accounting? Learning just enough so you don't have to hire a professional to help with accounting?

At the very least I believe it would save you some money — you wouldn't have to hire a bookkeeper. Your thoughts?

 

There is nothing wrong with a few accounting courses to understand what a balance sheet, income statement and other commonly used financial statements are all about. A basic understanding would enable you to ask appropriately informed questions and understand the answers. But I wouldn't forego using a CPA for the nitty gritty detail, analyses and tax accounting. You'll have your hands full learning and keeping up with the real estate investment business. HTH. YMMV.

 

Most brokers I know learn accounting on the job. They don't bother with attending a formal accounting course. What they concentrate on is the seminar for brokers since that will grant them the license. But I understand that good accounting knowledge is better for the career since it would help a broker when he goes up the ladder. As with the accounting of the business, real estate agencies normally hire a bookkeeper for posting the transactions and doing the basic accounting but the real accounting work is done by the accountant that they hire on a project basis.

 

I took coursework in college and supplemented it with private study to learning accounting. I highly recommend doing so; for your own financial world as well as when branching out into investments.

I handle all of our accounting, investments, etc. personally with one exception: taxes. For that I have a tax accountant handle that. Compliance with the tax is both time consuming and it involves dealing with some of the most byzantine law in the world. I figure it is money well spent having him deal with that. YMMV.

 

While if your interested in accounting then there's no harm in taking the courses and becoming qualified, but it's probably not something I'd do just in order to be able to do my own books and save myself some money.

While there are basic accounting courses available, I think even they are quite in-depth and if your not that way inclined then you'll quickly get overwhelmed by them.

 

We have a saying here - leave the accounting to accountants. Trying your hand on accounting is like administering self-medication. But on the contrary, if you are deeply entrenched in your business and you really want to know all about the proper place of numbers on the ledger and journal, I'd say attending an accounting course is best for you. Bookkeeping is not an easy chore because the headache comes in when there is a discrepancy in the total of your debit and credit.

 

My experience is that a good CPA pays for him or herself very quickly. I have wasted hundreds of hours doing things myself and I have a BA in Business and am 4 classes from having a Bachelor's in Accountancy. I kick myself for trying to do what the professionals specialize in.