Rent Roll – Everything You Need to Know

 April 05, 2019

The motivation for purchasing rental real estate is ultimately to collect steady rental income.  Occasionally, you might sell the property to generate a capital gain, but its main job is to generate rental income for the owner.  Therefore, buyers and investors must know clearly and in detail how much rent the property currently generates.  Furthermore, you need to know what potential maximum rental income is available.  A rent roll is a document that organizes this type of information in a clear, concise, easily legible, and recognizable format. 

What is Rent Roll in Real Estate?

A rent roll is a register of rents — how much, where they come from, and for how much longer.  Basically, it’s a listing of all the rentable units in a building.  When investors buy rental properties, they buy more than just a physical structure.  Truly, they also are purchasing the income from the building’s existing leases.  That is, they are buying the building’s rent roll.

Knowing What is Rent Roll Data

The rent roll, identified by the property’s address, contains a characteristic collection of data items.  For each unit, the following kinds of information appear in a rent roll:

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  • Unit identification:  Usually a floor and unit number.
  • Unit description:  Typically, type of unit and area in square feet.  For multifamily property, it’s the number of bedrooms and bathrooms.
  • Name(s) of resident(s)/occupant(s)
  • Dates:  Move-in date, lease expiration date, scheduled move-out date
  • Rental Amount
  • Security Deposit Amount
  • Additional Income:  Such as parking fees, storage room fees
  • Other Charges:  Pet fees, etc.
  • Amount Paid and Due Date

Apartment buildings and apartment complexes use rent rolls


Typically, property management software generates these leasing reports.  Today, you can choose from many different types and brands of property management software.  In fact, programs range from free shareware to paid-for professional software costing thousands of dollars, typically with monthly fees.  The owner/manager of a 20-unit apartment building can operate with a moderately priced program.  On the other hand, large apartment complexes and multifamily developments use more sophisticated software systems that tie together numerous elements.  Specifically, those elements cover accounting, marketing, and operational functions.

Virtually every system will have the ability to produce a rent roll transaction report.  This report contains the leasing data and summary transaction information.  Conveniently, the information should be exportable into various file formats, such as Excel spreadsheets.  In this way, building owners can share limited leasing data information with potential buyers without exposing sensitive data.  Often, you can withhold or disguise tenant names before distributing rent roll reports to potential buyers. 

Here are some reviews of the best rent roll and property management software.


The importance of the rent roll lies in its role as an information source.  Specifically, interested parties use such important information to help value a property.  You do this by calculating net operating income and plugging it into the cap rate equation.  Of course, the rent roll only gives half the necessary information–the income half.  To calculate NOI, you need the expenses half from the profit and loss statement.  Naturally, the information on the rent roll should tie directly to the gross income reported on the P&L.  In addition, this income information should match the income shown on the building’s offering memorandum.

Rent roll analysis is how you evaluate the reliability of rental income from a property.  It can reveal mis-valued leases, vacancy issues, and opportunities to raise rents.  It also discloses other income sources, such as fees.  The rent roll shows actual income.  In contrast, gross potential rent (GPR) hypothesizes what income would be under full occupancy at full market rents. 

Of course, the rent roll will almost always show rental income below GPR.  For starters, it’s likely that actual occupancy will be something less than 100%.  Furthermore, many tenants have leases that are below current market rates.  Moreover, some rents might be overdue.  Therefore, it’s important that an acquisition price reflects actual conditions rather than an overly optimistic viewpoint, or a valuation based upon proforma rents.

The rent roll is a snapshot.  You should ask for the last 24 months of leasing history to obtain the full picture.  Another useful report shows trailing twelve months data, aka a T12.

What is a Rent Roll Template?

You can download spreadsheets and word processing documents that provide an empty, formatted rent roll template.  You can use this as the starting point for developing your own rent roll.  However, if you use property management software, the rent roll template is already there, so you will not need a separate rent roll template.

Video – Rent Roll Template for Excel | RentPrep

How to Perfect Your Rent Roll

Your information should use the same high-quality data that you use for all your property management activities.  If it contains mistakes, it probably means that your database has bad or possibly date data.  If your rent roll varies widely from your P&L, you will need to do a system audit to pinpoint the problem.  Never let data problems fester in your system as it can lead to significant errors.

Tips, Tricks, and Advice

Here are some tips to help you work with a rent roll.

Check for Many Recent Leases

A building owner who decides to sell the property will want it to look fully occupied.  To that end, the owner might offer below-market leases to fill vacant units.  Be sure to check the lease dates on the rent roll to see how many are relatively new.  Also, check to see if the new leases are below market.  Alternatively, recent leases might include other lease concessions, such as discounted security deposits or free last-month’s rent.  No doubt, concessions require more research, but they can most assuredly impact future income.  Finally, you’ll want to know whether the owner reduced tenant screening standards in order to fill vacant units thus fostering an overly rosy outlook/rent roll.

Look for Red Flags

Certain issues should be apparent from inspection of rent rolls.  You’ll want to check for high turnover, in which tenants seldom renew their leases.  Obviously, you will want to find out why this is the case.  Also, a recurring pattern of collection issues and unpaid fees reduces the dependability of rental cash flows.  When you detect red flags, you must increase your due diligence. 

Check Below-Market Rent Claims

A building seller might represent that most of the tenants have below-market rents.  The reason is to entice potential buyers with the prospect of raising rents.  Clearly, this would increase rental income and would supposedly merit a higher purchase price.  Emphatically, do not accept these claims at face value.  Instead, compare the current lease rates with those of comparable properties and with the market in general.  Truthfully, if it turns out that the leases are generally at market, then the offering price is too high.

Evaluate Fee Payments

You can gain insight into the quality of a building’s income by reviewing fee payments.  Are tenants paying their utility and parking fees on time?  Additionally, are the current tenants fully using the building’s parking facilities?  Logically, improvements in fee collection and facility utilization can increase net income and therefore make the building more valuable.

Review Each Unit’s Vacancy History

Pay attention to units that were vacant for several months.  Perhaps they were under renovation, but perhaps they were simply difficult to rent.  For example, see if several three-bedroom units were vacant while smaller units were not.  Frankly, this may indicate weakness in the local market for three-bedroom units and thus reduce the value of the building.  Alternatively, the vacancy might indicate a time-consuming eviction battle, or structural damage to the unit.  Additionally, high vacancies might indicate pest infestations or poor property management and maintenance.  Carefully research each problem unit to see how it might affect future cash flows.

Hire an Expert

It requires expertise and experience to properly analyze a rent roll.  Unless you have that expertise, you’ll want to hire an expert to examine and verify a rent roll.  In this way, you will extract the most valuable information from a rent roll.  We at Assets America® will be happy to recommend a trustworthy expert to help you analyze a rent roll.

Frequently Asked Questions: Rent Roll

Where can I find rent roll templates?

There are at least a dozen Internet providers of rent roll templates.  Some of them are free and some cost money.  Look for templates that are complete and that operate properly.  If you use property management software, the template is already built-in.

When do you need a rent roll?

Beside its value for potential buyers, you can use a rent roll to:

  • Settle balance disputes with tenants
  • Prepare final closing reports for exiting tenants
  • Help with evictions
  • Perform annual audits
  • Prepare tax returns

How do you calculate rental property value?

You can calculate the value of a rental property with the help of current and accurate rent roll information.  As mentioned earlier, the rent roll reveals the gross income from the property.  When you subtract the operating expenses, you arrive at the net operating income, or NOI.  Dividing the NOI by the cap rate gives you the market value of the property.

What is a T12 in real estate?

T12, which we also call TTM, stands for the trailing twelve months of income and expense data.  You can use the T12 and rent roll together to gain a better picture of a property’s performance.  T12 can reveal trends that you won’t see in a rent roll, which is a snapshot of a point in time. 

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