What Is A Rent Roll & Why Is It Important To Real Estate Investors?

What is a Rent Roll

Whether you are a landlord, a real estate investor, a property manager, or someone curious about real estate investing, knowing what a rent roll is and how it works can be beneficial to you for a number of reasons. Here’s everything you need to know about it!

What Is A Rent Roll?

A rent roll is a real estate document that helps property owners/ landlords keep track of the rent received and rent pending from each tenant. It also has important information about the residents and helps the investors calculate the amount of rental income that they have coming in from multiple properties or multiple units within the same property. Professional property management experts and more serious property investors use information from the rent roll to calculate the net operating income, cap rate, gross rent multiplier, internal rate of return etc.

Rent Roll Template

What is a rent roll form and what is it made up of, you ask? Well, depending on what information you want and how much of it you want to keep track of, a rent roll can have several different components. The following list covers the elements of a rent roll form:

  • Name of property owner or property management firm
  • Property address listed on lease agreement and tax forums
  • Type of property – for example commercial, multi-family unit etc.
  • The square footage of the unit
  • Number of beds and baths 
  • Additional features – for example garage, storage shed, accessory dwelling unit etc.
  • Name of tenant
  • Monthly rent amount
  • Lease start date
  • Lease end date
  • Security deposit amount collected by landlord
  • Rent due date
  • Rent paid date
  • Additional tenant expenses – for example residents will be responsible for paying for utilities or building maintenance charges etc.
  • Total monthly rent collected from all units
  • Total annual rent collected

Who Uses A Rent Roll?

Many individuals and companies benefit from using and reviewing rent rolls. These are:

Real Estate Investors & Landlords

A rent roll helps investors and landlords to keep track of all the incoming and pending rent. It also helps them with checking for vacancies in their rental units.

Property Managers

How is a rent roll useful to a property manager? Well, apart from keeping track of vacancies, a property manager uses a rent roll to identify which tenants could default on paying their rent in the future; a rent roll helps with identifying red flags.

A Prospective Buyer

Before buying a rental property, prospective buyers do their due diligence by going through the current owner’s rent roll report. Based on this report, they can be assured that the property rakes in a stable income.  

Mortgage Brokers, Lenders And Banks

Before approving a loan or lending money, mortgage brokers, lenders, and banks check the rent roll to assess the risks and benefits.  

Benefits Of Rent Roll To Commercial And Residential Real Estate Investors

  1. It allows real estate investors as well as property managers to quickly and easily view rents due, lease terms, late fees, default payees etc.
  2. Rent roll provides a bird’s eye view of all the historical income and expenditure.
  3. It helps with calculating revenue and growth. An investor or property manager can compare current month’s income with the previous years’ income to gauge the rental unit’s growth.
  4. A rent roll helps with keeping a tab on evictions, their reasons, and the legal costs incurred due to them.
  5. It helps the investor or manager to understand whether the current rental rate is at par with the current market value of the rental unit.  
  6. A rent roll helps prospective investors understand the current and future cash flow. 
  7. Commercial property management firms and investors can benefit from a rent roll since it gives a clear picture of the financial performance of the properties.   

Maximize Your Properties’ Earning Potential With BFPM Experts

Deep analysis of a rent roll can provide you with important information regarding potential rental income, tenant concentrations, late fee inflows, property vacancy, and tenant turnovers & renewals. If you need help with getting your rental properties professionally and efficiently managed, feel free to book a 15-minute consultation call with our property management expert.

Trevor Henson

Trevor Henson is an experienced entrepreneur (10+ highly-successful start-ups) and property investor with a demonstrated history of building and leading teams in investment property management environments, maximizing returns for property owners, and optimizing properties through construction management and re-positioning. He…
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Frequently Asked Questions(FAQs)

After building your rental roll, you might decide to sell all or part of it to raise funds for new opportunities. You can calculate the value of your rent roll by looking at historical performance data and then basing the valuation on past figures. The standard formula for this is: Average weekly rent X average management fee / 7 X 365. You should then multiply the figure you get by the number of properties you have.

Following factors affect a rent roll valuation: 1. The actual rent paid 2. The number of properties under management 3. The various locations of the properties 4. The length of time managed 5. Vacancies 6. Ancillary fees etc.

You should look for the following factors: 1. Fees and weekly rent comparison 2. Overview of the historical statistics 3. Property type 4. Properties per owner 5. Portfolio location & desirability