A rent roll analysis is the careful review of actual rent payments, including any fees or utilities, and comparing that to other source documents such as the lease. If any discrepancy arises, an owner can discuss it with the management team to see where the problem lies.
The rent roll is the lifeblood of any multifamily and commercial real estate property. The rent collected not only drives gross revenue; it can be a determining factor in analyzing a new purchase or tracking your property's performance over time.
Rent is not only the amount collected from tenants to live in the building any given month. Other factors can go into a rent roll.
Other items on a rent roll also called gross scheduled rents can include:
To start the rent roll process, you'll need to have leases back at least 12-14 months. This will give you an idea past market rents a year ago. By taking the time to verify where each tenant is currently for rent payments, fees, utilities, and extra charges, you'll know if the property has been appropriately managed during this time frame. The longer time frame also provides you with a good baseline income to work with during deal analysis.
When considering selling a property or purchasing a new one, rent roll analysis is essential to the property's cap rate and future improvements.
Some of the benefits of rent roll analysis include:
Rent roll analysis is not a complicated process, but you must be meticulous in your data collection efforts and set aside an appropriate amount of time.
Clik.ai has been helping commercial Real Estate investors, brokers, lenders, and managers navigate rent roll analysis since 2017 and have helped identify $12 Billion in commercial real estate opportunities.
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When looking for a company to help with rent roll analysis, consider the Services Hub. Our on-demand team of commercial real estate analysts has expertise in rent roll analysis, lease abstraction, automated multifamily underwriting, and much more.