What is Real Estate Rent Roll?

As a real estate company or investor, you’re constantly aware of your investments’ performance and looking for opportunities to build value. It’s natural to focus on the financial aspect of your assets, as this fuels your growth potential and investment portfolio.

By creating an accurate rent roll as part of your commercial real estate accounting, you’ll be able to identify key income streams and accurately evaluate your income-generating properties.

Starting a Commercial Real Estate Rent Roll

Your rent roll is an itemized snapshot of a particular property and includes primary lease details for each tenant within the asset. Investors will often request a rent roll as part of their own due diligence to better understand a property’s value and lenders use this information for the underwriting process.

A commercial real estate rent roll document needs to include the following items:

  • Property Address
  • Building Type
  • Tenant Name
  • Unit Number and Size
  • Rentable Square Footage
  • Total Occupants
  • Lease Type
  • Lease Start and End Date
  • Rental Rate
  • Additional Recurring Charges
  • Security Deposit
  • Gross Income

 

Advantages of Real Estate Rent Roll

Now that you know what makes up a rent roll, you can start predicting the profitability of your commercial property. Reviewing a rent roll over several months or years will help identify any vacancy periods or areas of financial opportunity.

You may be wondering, however, what exactly makes a rent roll great and maximizes the value of a property in the eyes of investors?

High Occupancy

A property full of tenants is always better than a property with high vacancies. High occupancy communicates a steady, income-generating value that investors are looking for and highlights the potential for future profit gains.

Long Tenure and Long-Term Leases

These are two of the best ways to show that your building offers low-risk and maintains its income level. Long-term leases provide more financial security and less risk than shorter-term leases by tenants who may not renew. A longer tenure may also represent a lower turnover rate, meaning happy tenants who consistently rent.

Staggered Lease Expiration Dates

By including a portfolio of tenants with widely distributed lease expirations, you’ll reduce the impact of the property’s Net Operating Income(NOI) when it comes time to acquire renewals, meaning lower risk and more predictable revenue.

 

Real Estate Rent Roll Help

A rent roll is beneficial for understanding the financial health of your commercial real estate, but setting up just a single rent roll can be time-consuming and exhaustive. If you manage multiple properties, this may not be ideal or fit into your workflow, but a rent roll is crucial to evaluating your investment success.

At Lescault and Walderman, we handle all of your property-based accounting, providing reliable cash flow projections, maximizing revenue, and empowering you to make more profitable decisions. Using best-in-class accounting and management software for your commercial real estate, building your rent roll for each property is streamlined and accurate. There’s no need to track down security deposits, worry about manual input errors, or stress over intricate tenant details.

Schedule your complimentary discovery call to partner with us and get started on accurately assessing your next real estate investment.

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  • November 1, 2022

  • November 1, 2022