Real Estate Accountants
Do you have any accounting services in particular for Real Estate Agents that you recommend and why?
We have found over the last 9 years in particular, since 2005 that management of working capital / cash reserves has been the most important aspect of a Real Estate's business success; followed closely by overhead costs management.
As a result we find real estate agents who use our Mooloolaba, Noosa and Brisbane accounting services have greatly valued our tax estimate and cash flow estimating service.
Despite the fact that it is very difficult for an agency to plan its revenue - because of the high exposure to the volatility of the property market - we have found some agencies are able to benefit from analysing their prior sales and revenue record and from us using this as a basis for tax estimates.
Even if this results in a revised downward estimate of sales - good records of prior activity have been a useful baseline for establishing an estimate of forward revenue in discussion with principal agents. The relevance is obviously keeping an eye on solvency but also it can help with tax....
We have fund it very important that we actively manage our Real Estate agents tax installments by not just accepting the tax offices nominated estimates of installments but by working with the principal agent to develop our own Brisbane and Sunshine Coast accountants estimates and make variations to the installments where appropriate.
It can be a great disservice to a Real Estate Agent, who can have large swings in revenue, to just have them paying tax installments based on last years revenue. It can even send them broke. For indispensable tax accountant advice and services, contact the Ascendia team.
What financial management observations do you have of these businesses based on your experience in providing business services?
Decisions regarding taking on additional costs / especially fixed costs must be taken very carefully after considerable review.
Some business acounting & management strategies to consider, that we have seen used successfully, include:
- Making the most of overheads so that they are used for multiple purposes such as using an office for as many agents as possible or using admin staff for two offices via VOIP reception phones (one reception for 2 offices).
- Maintaining an office in a low rent or slightly more out of the way location but with great parking and window frontage- because it can be maintained through bad as well as good times and you already have great advertising thanks to your property adds - which are telling buyers and sellers where you are.
- Run two smaller offices, instead of one larger office, but in 2 different locations with different economic exposure (city and town or acreage / hinterland & beach so as to diversify economic exposure and get a broader catchment for the same accommodation costs.
- In the good times when sales are strong - don't expand too much - direct surplus revenue under advisement into investing in rental books at this time. Often demand for these is low in these times. This will diversify your income stream and enable you to maintain revenue in the bad times.
- Consider whether you can get involved in commercial as well as residential letting / leasing and selling. This gives you 4 areas of business and expose you to different types of clientele who you may be able to cross sell to.
- Doing something different that buyers and sellers value.
- Reviewing your brand, is it better to pay more for a better brand - is a saving on a weak or no brand really a saving?
- Absorbing advertising costs - is there any circumstances where this may be worthwhile?
What Additional Services Are Useful For Real Estate Agents?
We have provided purchase / financial verification services to Agents who have purchased rental books.
We have also undertaken Profit & Loss Reporting services for large real estate agents needing accountants when looking to sell - to be able to provide verified P&L for sale reports to prospective buyers of the agency.
Our Brisbane, Mooloolaba and Noosa accountants have also advised clients operating property management businesses (which meet the business activity tests) as well as passive property owners / investors - on their tax situation in the event of sale. This can assist an agent to arrive at a price at which a seller will agree to sell their property - whether they are owners of commercial or residential property. If the tax is lower than they expect - the owner may accept a more realistic price. Some Agents refer their sellers to us to get an estimate of tax prior to listing to assist them to agree on a listing price.
We've been doing this for 13 years. Benefit from our expert experience.