Are Your Real Estate Investments Getting the Tax Attention They Deserve?
Whetzel & Co. specializes in accounting and tax services for Houston-area real estate investors and property managers. From single rental properties to multi-entity portfolios, we provide property-level financial tracking, tax optimization, and investor-ready reporting that gives you complete visibility into your real estate operations.
Real estate investing creates unique accounting challenges that general CPAs often miss. Cost segregation opportunities, 1031 exchange timing, passive activity loss rules, depreciation recapture, entity structuring for liability protection, and investor reporting requirements all demand specialized knowledge. That is exactly what we bring to the table.
Why Whetzel & Co. for Real Estate?
Our founder, Tim Whetzel, has deep experience working with real estate investors and property management companies. We understand the nuances of this industry because we live in it every day. When you work with a general CPA firm, you often have to explain what a 1031 exchange is or why you need separate books for each LLC. With us, those conversations never happen. We already speak your language.
We also understand that real estate investors need more than just year-end tax returns. You need monthly financials that track each property independently, reporting that your lenders and partners can rely on, and a tax strategy that accounts for how your properties interact within your larger portfolio. We deliver all of this as part of our standard engagement.
Whether you own two rental homes or a portfolio of twenty units across multiple entities, we scale our services to match your complexity without overcharging for simplicity.
What We Do
Our real estate accounting services include entity structure setup and optimization for LLCs, LPs, and holding companies, property-level bookkeeping with income and expense tracking per unit, bank and credit card reconciliation for each entity, monthly financial statement preparation per entity, rent roll tracking and vacancy analysis, capital expenditure tracking and depreciation schedule management, 1031 exchange coordination and compliance, cost segregation study coordination, investor and lender reporting packages, and year-end tax return preparation fully integrated with your books.
On the tax side, we handle individual returns with Schedule E rental income, partnership returns for multi-member LLCs, S-Corp returns for property management companies, Texas franchise tax filings, and multi-state returns for investors with out-of-state properties.
Who This Service Is For
Our real estate accounting services are designed for individual rental property owners with one or more units, real estate investors with multi-entity portfolio structures, property management companies, fix-and-flip operators, real estate developers, and syndication sponsors who need investor reporting. We work with clients across the Houston metro area, including Katy, Sugar Land, Richmond, and Rosenberg, as well as investors with properties in other Texas markets and out of state.
What to Expect From Our Process
Step 1: Portfolio and Entity Review
We start with a free consultation to review your current portfolio, entity structure, and accounting setup. Many investors come to us with entities that were set up years ago without tax optimization in mind. We evaluate whether your current structure is protecting you and minimizing your tax exposure, and we recommend changes where warranted.
Step 2: Books Assessment and Cleanup
Before we begin monthly work, we assess the current state of your books. If cleanup is needed, we reconcile accounts, correct misclassified transactions, properly capitalize improvements versus repairs, and establish clean, property-level tracking going forward. This is critical because your tax return is only as good as your books.
Step 3: Monthly Bookkeeping and Reporting
Each month, we categorize and reconcile all transactions per entity and per property, prepare property-level profit and loss statements, track capital expenditures and depreciation, and deliver a summary report highlighting cash flow, occupancy, and any items requiring your attention.
Step 4: Year-End Tax Planning and Filing
Well before year-end, we conduct a tax planning session to review your portfolio performance, identify any tax optimization opportunities such as accelerated depreciation or loss harvesting, and prepare for the upcoming filing season. When it is time to file, your books are already clean and your returns are prepared accurately and on time.
Pricing
Real estate accounting starts at $300 per month for a single-entity portfolio. Multi-entity portfolios and development projects are priced based on the number of entities, transaction volume, and complexity. Tax return preparation is priced separately based on the number and type of returns required. We always provide a clear, detailed quote before starting any work.
Frequently Asked Questions About Real Estate Accounting
Should each of my rental properties be in a separate LLC?
It depends on your specific situation, risk tolerance, and portfolio size. Generally, holding rental properties in LLCs provides liability protection by separating each property from your personal assets and from each other. However, there are costs to maintaining each entity, including filing fees and separate tax returns. We help clients evaluate the trade-offs and design a structure that balances protection with practicality.
What is a 1031 exchange and how can it help me?
A 1031 exchange allows you to defer capital gains taxes when you sell an investment property and reinvest the proceeds into a like-kind replacement property. The rules are strict, including specific timelines for identifying and closing on replacement properties, and the exchange must be facilitated through a qualified intermediary. We coordinate the tax side of 1031 exchanges regularly and can guide you through the process from start to finish.
How do you handle depreciation for my properties?
We maintain detailed depreciation schedules for every property in your portfolio, tracking both the building component and any improvements or capital expenditures. We apply the correct useful life and method for each asset, including bonus depreciation where applicable. For larger properties, we also coordinate cost segregation studies, which can significantly accelerate depreciation and reduce your current-year tax liability.
Can you help me understand my property-level profitability?
Yes. This is one of the core deliverables of our real estate accounting service. We track income and expenses at the property level so you can see exactly how each unit or property is performing. This includes net operating income, cash-on-cash return, and expense ratios. Knowing which properties are performing and which are dragging on your portfolio is essential for making smart investment decisions.
Do you work with out-of-state properties?
Yes. Many of our Houston-based clients also own properties in other Texas markets or in other states. We handle the bookkeeping and tax filings for out-of-state properties, including multi-state return preparation and compliance with each state’s specific filing requirements.
What if my books have not been maintained for my rental properties?
We can help. Many real estate investors come to us with records that are incomplete or disorganized. We offer cleanup services to reconstruct your financial records from bank statements, closing documents, and available receipts. Once we have established a clean baseline, we transition into ongoing monthly accounting so the problem does not recur.
Houston Real Estate Accounting and Tax Services
Real estate is one of the most tax-advantaged asset classes available, but only if you have an accountant who understands the rules. From depreciation strategies and cost segregation to 1031 exchanges and passive activity loss limitations, real estate accounting requires specialized knowledge that most general accountants simply do not have.
Whetzel & Co provides dedicated real estate accounting and tax services for Houston investors, developers, and property managers. Whether you own one rental property or a portfolio of commercial buildings, we help you maximize your tax benefits, keep your entities organized, and make smarter investment decisions.
Real Estate Tax Services
Rental Property Tax Preparation. We prepare tax returns for all types of rental properties including single-family homes, multi-family units, commercial properties, short-term rentals, and mixed-use buildings. We ensure all income is properly reported and every allowable deduction is captured, including mortgage interest, property taxes, insurance, repairs, property management fees, HOA dues, and depreciation.
Depreciation and Cost Segregation. Depreciation is the single largest tax benefit available to real estate investors. We calculate depreciation correctly for all your properties and advise on whether a cost segregation study could accelerate your deductions. Cost segregation reclassifies building components into shorter-lived asset categories, often generating significant first-year tax savings on commercial properties and larger residential investments.
1031 Exchange Planning. A 1031 exchange allows you to defer capital gains taxes when you sell an investment property and reinvest the proceeds into a like-kind property. The rules are strict, the timelines are tight, and mistakes can be costly. We guide our clients through the entire exchange process, coordinate with qualified intermediaries, and ensure all IRS requirements are met.
Passive Activity Loss Rules. The passive activity loss rules determine whether you can deduct rental losses against your other income. We help you understand your status as either a passive or active participant, navigate the real estate professional designation rules, and structure your activities to maximize your ability to use rental losses currently rather than carrying them forward.
Real Estate Professional Status. If you qualify as a real estate professional under IRS rules, you may be able to deduct unlimited rental losses against your other income, including wages and business income. This designation requires meeting specific hour requirements and material participation tests. We evaluate whether you qualify and help you document your time to support the designation if audited.
Entity Structuring for Real Estate
How you hold your real estate matters for both liability protection and tax efficiency. We advise on the optimal entity structure for your investment strategy, whether that involves individual LLCs for each property, a series LLC, partnerships for joint ventures, or S-Corps for management companies. We also handle the formation, tax ID applications, and ongoing compliance for all your entities.
Real Estate Bookkeeping
Accurate property-level bookkeeping is essential for understanding the performance of each investment. We track income and expenses by property, reconcile bank accounts for each entity, prepare monthly financial statements, and ensure your books are always ready for tax preparation or investor reporting. Our real estate bookkeeping clients have clean, organized records that make tax time efficient and make it easy to evaluate the performance of individual properties and the portfolio as a whole.
Who We Work With
Our real estate clients include individual investors with rental property portfolios, fix-and-flip operators, real estate developers, commercial property owners, property management companies, real estate syndications and fund managers, and short-term rental operators using platforms like Airbnb and VRBO. We understand the unique accounting and tax challenges each of these business models presents.
Frequently Asked Questions
How do I know if I qualify as a real estate professional?
To qualify, you must spend more than 750 hours per year in real estate activities AND more than half of your total working hours must be in real estate. If you have a full-time job outside of real estate, qualifying is very difficult. We evaluate your specific situation and advise whether pursuing this designation makes sense.
Should each property be in its own LLC?
In most cases, yes. Holding each property in a separate LLC provides liability protection that prevents a lawsuit or claim against one property from putting your other assets at risk. We help you set up the right structure and ensure all entities are properly maintained for tax and legal purposes.
Do you work with out-of-state real estate investors?
Yes. Many of our clients own properties in multiple states. We handle the multi-state tax filing requirements and ensure income and expenses are properly allocated to each jurisdiction.
Maximize Your Real Estate Tax Benefits
Real estate investing is one of the best wealth-building strategies available, but only if your accounting and tax strategy keep up with your portfolio. Whetzel & Co provides specialized real estate accounting and tax services for Houston investors. Call (832) 699-1031 for a free consultation, or contact us online to discuss your real estate tax needs.