A rent roll report is an in-depth report that landlords, owners, and property managers use to interpret the revenue of one or more properties they own. Tenants and Franchisees use a rent roll to understand their obligations under their leases. For those new to property management, it may be a bit difficult to fully understand what a rent roll is and how it functions. Today, we will review the importance of a rent roll.
Rent rolls are used by property owners and managers to track, analyze, and plan for rental income. It can be constructed for any type of income-producing real estate, such as single-family homes, multifamily buildings, office buildings, shopping centers, and land leased for agricultural use. Essentially, a rent roll shows the rental income from a real estate asset. This information can be used to calculate data such as net operating income (NOI), internal rate of return (IRR), gross rent multiplier (GRM), and cap rate to see the profit and viability of properties.
A rent roll breaks down the rent per unit and/or suite. It also gives a total rent amount for the entire investment property. It collects rent data from each individual tenant’s lease agreement and puts it into one easy-to-read document. There are property-specific rent rolls as well as rent rolls for an entire property portfolio. These allow you to view not only one particular property, but everything you manage.
In the world of real estate, time is money, and rent rolls help to save both. The landlord doesn’t have to waste time digging up each tenant’s lease to determine rent amounts or lease start and end dates. With all the data in a single, intuitive report, they are able to see profitability at a glance.
A rent roll for a single-family rental property can easily be created using spreadsheet software like Microsoft Excel or Google Sheets. For multi-family and commercial properties, things can become a bit more complicated. That’s where property management software like RAAMP comes in. RAAMP takes the hassle out of finding all of the data yourself and instead provides it in one easy-to-access place.
The data for a rent roll comes from a few sources: county tax assessors, MLS listing information, appraisal reports, lease agreements, and tenant files. The data on a rent roll can vary by property type, but most will include the following:
The rent roll is an all-purpose document that can be used by buyers and sellers, property managers, real estate investors and landlords, and lenders. It can provide a surprising amount of detail on a single page, such as the information listed in the previous section. Rent rolls can be used to increase profitability by increasing rents, renovating, tenant screening, etc.
Rent rolls are a useful, efficient tool across real estate professions. They streamline information, help you see data at a glance, assist in calculations, and more. While rent rolls may seem confusing at first, they are intuitive spreadsheets that are easy to understand and assist in making a profit. Time is money, and a rent roll can help you gain an edge on both.