Kris McEvoy, cross-border tax expert and founder of LEAP ACT, recently joined Kris McEvoy, CPA and founder of LEAP ACT, joined Glenn Sutherland on A Canadian Investing in the US to talk about a topic that trips up a lot of investors: bookkeeping.
Whether you’re just starting out with a few buy-and-hold rentals or juggling multiple flips, having the right systems in place can save you serious time, money, and confusion at tax time. In this episode, Kris breaks down when to start using bookkeeping software, common mistakes investors make, and how to avoid them.
When Should You Start Using Bookkeeping Software?
The short answer: sooner than most people think.
If you’re spending hours each month tracking receipts or updating spreadsheets, it’s probably time to move to a platform like Xero or QuickBooks Online. These tools help streamline your financial records, prep for tax season, and give you a clearer picture of how your business is performing.
Kris recommends considering bookkeeping software if:
- You’re operating through a corporation
- You’ve started flipping or managing multiple properties
- You’re losing track of payments, expenses, or profitability
- You want to outsource your bookkeeping in the future
For simple buy-and-hold setups, spreadsheets may work in the early stages. But as your portfolio grows, so does the need for reliable systems and clean documentation.
Why Bookkeeping Matters More for Flips and BRRRRs
For flippers and BRRRR investors, bookkeeping is critical.
BRRRR stands for Buy, Renovate, Rent, Refinance, Repeat. This method often involves multiple stages of spending, refinancing, and shifting how a property performs financially. That means your bookkeeping needs to track exactly when and how costs are incurred, so you know your real return on investment.
Flips are also complex. Renovation budgets, loan interest, and holding costs can quickly add up. Without proper tracking, it’s easy to lose sight of your margins. Even small errors in your books can lead to missed deductions or tax issues.
For example, interest paid during a renovation is supposed to be added to the cost of the property. It’s not something you can deduct monthly. These small differences matter when it comes time to file your taxes and calculate your profits.
Does Your Bookkeeper Understand Real Estate?
Not every bookkeeper is familiar with real estate-specific accounting.
There are rules around things like capitalizing renovations, deducting loan interest, and tracking project costs properly. If your bookkeeper is only entering numbers without understanding the context, it could lead to reporting errors or missed tax planning opportunities.
Real estate bookkeeping requires more than just software knowledge. It calls for experience with the investment strategies you’re using.
Should You Do It Yourself or Hire Help?
Many investors start by doing their own books, especially with just a few rentals. But once your portfolio grows or your strategies become more complex, it makes sense to delegate.
At LEAP ACT, we specialize in bookkeeping for real estate investors. We use Xero and other automation tools to make the process efficient, accurate, and scalable. If you’re doing flips, managing several properties, or want to spend more time on your business and less on spreadsheets, we can help.
Talk to a Team That Understands Real Estate
If you’re unsure whether your bookkeeping is accurate or if it’s becoming a time-consuming task, we’d be happy to help.
Need help with bookkeeping that’s accurate, tax-smart, and tailored to real estate?
Get in touch with Kris McEvoy and book a time to talk.