What Is a Rent Roll?
Tracking Income Potential of an Investment Property
Keeping detailed financial records is important in the daily operations of your investment property, and equally important for investors who you are considering buying your investment property. A rent roll is one essential landlord document which allows you to easily view rent due and rent collected. Learn why a rent roll is important and the vital information to include.
What Is a Rent Roll?
A rent roll focuses on one specific thing: the rent for the investment property. It focuses on the gross rent collected, not the net rent after expenses, such as a monthly mortgage, insurance, taxes, or utilities.
Rent rolls show the potential gross rent of a rental property.
The rent roll collects the rent data from each individual tenant’s lease agreement and puts it into one, easy-to-read document. The landlord does not have to waste time digging up each tenant’s lease to determine rent amounts or lease start and end dates.
The rent roll breaks down the rent per apartment unit and also gives a total rent amount for the entire investment property. It is basically a statement of the income potential of the rental property.
When Is a Rent Roll Used?
For Landlords and Property Managers
Rent rolls are used by landlords and property managers in the daily management of the investment property. The rent roll can be used to analyze the anticipated rental income, the actual rental income collected, and if there is room for rent increases based on the fair market rent for the area.
Since the rent roll is broken down by unit, it can easily show which tenants have not been paying their rent or which tenants have been habitually paying their rent late. This can help the landlord stay on top of problems and file for evictions if necessary.
For Buyers and Investors
A rent roll is important when an investor is looking to purchase a rental property. This document shows the income potential of the property and if the property has been generating stable income.
The prospective buyer will analyze the rent roll as one of the factors in determining if the property could be a good investment. The investor will evaluate the current numbers and also see if there are ways to increase this rental income. Ways to increase profitability include increasing the tenants’ rents, if current rents are under market value or if renovation could warrant higher rent price, or more consistent rent collection through improved tenant screening.
What Information Is In a Rent Roll
Since a rent roll is created by the landlord of a specific property, the information that is included in the rent roll can vary. However, there is certain general information that any good rent roll includes:
This will appear at the top of the spreadsheet and will include any identifying information for the property owner and the actual investment property.
- Name of Property Owner
- Address of Rental Property
- Name of Property Manager/Management Company If Applicable
There should be a dedicated row for each rental unit containing the following information.
- Unit Number: This should match the unit number on the lease agreement, such as Apartment #1 or 3A.
- Square Footage: How large the unit it. This is helpful when comparing rent prices to other units in the area.
- Number of Beds and Baths: Again, based on the size of the unit, this will help determine if you are collecting the fair market rent for the unit
- Security Deposit Collected: How much you collected from the tenant upon move in.
- Rent Amount Owed: How much the tenant owes each time rent is collected.
- Rent Collected: Breakdown of date rent was collected, amount collected and method of payment.
- Lease Start Date: The date the lease began and the first rent payment was collected.
- Lease End Date: The date the lease ends if there is an end date or if it becomes month to month.
- Additional Tenant Expenses: If the tenant pays any additional expenses, such as utilities or building maintenance.
- Additional Unit Information: The landlord can use this section to write any comments about the unit, such as a scheduled rent increase or renovations that have been completed or are scheduled on the unit.
This is the total rent amount that could be collected each month or each year for the property.
- Monthly Rent Collected: To get this number, add together the monthly rent for each unit.
- Yearly Rent Collected: Yearly rent can be calculated by multiplying the total monthly rent collected by twelve.
How to Create a Rent Roll
A rent roll document can easily be created using a spreadsheet program, such as Microsoft Excel. You simply have to label the rows and columns with the proper headings and input the data as you collect it. For a step-by-step tutorial, check out this guide.
Bottom Line For Landlords
Rent rolls can help landlords manage their finances and increase profitability, but these detailed records can also help you sell your investment property when the time comes.
Wells Fargo. "Rent Roll Form," Accessed Oct. 1, 2019.
Federal Deposit Insurance Corporation. "Affordable Housing Program - Property Owner's Manual, Reporting, Record-Keeping, and Administrative Requirements," Page 6-6. Accessed Oct. 1, 2019.
Mortgage Bankers Association. "MISMO Releases Expanded Rent Roll Dataset, Use Cases for Member Comment," Accessed Oct. 1, 2019.