How to Read a Rent Roll

Do You Know All of the Elements of a Rent Roll?

This book is for people that operate, own, or purchase rental income property. In the acquisitions process, you must validate contractual rental revenue. The seller will provide you with certain financial data, including the rent roll, for your inspection during the due diligence period; it is up to you to validate this information. Buying rental property is not an impulse purchase. 

The acquisition process is a significant time commitment and one that can be very rewarding. As a prospective buyer, you need to know how to build, understand, and use the rent roll to your advantage. This book is a technical guide to rent roll analysis. The objective here is to narrow your attention to one thing and one thing only: estimating the validity or reliability of contractual rental revenue collected from income property. 

Why is this important? Because getting it wrong undermines any further work performed towards estimating Net Operating Income (NOI). Suppose the revenue number is suspect, over-reported, under-reported, or credit quality is without support. What's the point of devoting energy, resources, or dollars to completing the rest of the equation towards NOI? Without a solid foundation based on valid rental income, the balance of your due diligence is an exercise in futility.

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