Present your revenue to reduce buyer uncertainty

Investors buy apartment buildings to make money. Without a detailed rent roll, it's hard to know if making money is feasible.

Yet, many sellers do not offer a detailed rent roll for buyers. Some offer no rent roll at all while others provide limited information, leaving buyers with unanswered questions and an incomplete picture of the revenue potential at your property.

Properties without a clean rent roll often sit on the market or sell at a discount because investors can't get comfortable offering full market value.

You want to ensure you get the best deal possible, and preparing your rent roll before listing the asset is the most effective way to get buyers interested and encourage them to proceed with further analysis.

What is a Rent Roll?

A rent roll is one of the most useful documents in multifamily real estate.

It's used by apartment investors, property managers, and lenders to understand the income stream from a rental property. It provides an itemized revenue breakout for each unit, typically including:

Unit type
Square footage
Occupancy status
Tenant move-in date
Lease expiration date
Security deposit held
Monthly rental income
Additional monthly charges
Affordability programs (if applicable)
Late charges, past due rent, and delinquency

In essence, the rent roll summarizes leases and revenue potential at your property.

Examples - One Good, One Bad

I've seen all kinds of rent rolls—from professionally designed rent rolls to lists handwritten on a legal pad. Here's a comparison:

Example of a Useful Rent Roll

The following rent roll includes everything a buyer would need to quickly understand the revenue streams coming from each unit.

This rent roll also includes a summary at the end, making it easy to understand average performance across the property by unit type.

One quick look at this summary, and you can quickly gather key insights about the revenue streams at this property and determine how it is performing.

For example, I noticed this asset is well managed. I can tell because the current rental income is in line with market rents for all three unit types. This is useful for buyers to know, especially considering it is almost 99% occupied.

Example of a Bad Rent Roll

This was a rent roll I recently received from an owner for a valuation proposal.

This rent roll creates more questions than answers:

Are these 1-bedroom units? 2-bedroom units? What's the unit mix?
Are these new leases? Has there been turnover?
What makes unit #1 rent for $180 more per month than unit #5?
What's the square footage of these units?
How long has unit #10 been vacant?
Are the tenants paying on time?

And about a thousand other questions come to mind.

Now imagine you're trying to sell your building. Which of these two examples would attract investor attention?

If it isn’t obvious, I’ll tell you. The seller with the clean rent roll will receive a much better result from their sale compared to the seller who handwrote it.

Yet, you might be surprised how many real estate investors don’t prep their rent roll before a sale.

This is especially true for small to medium size assets (less than, say, 20 units). I see rent rolls of all kinds for listed properties, including

Handwritten
Typed in the body of an email
Excel sheets where the math doesn’t add correctly

Buyers need to understand the investment potential of an asset if they’re going to make a strong offer. Having a clean, detailed rent roll goes a long way in helping them feel confident enough to move forward.

Hopefully, these examples show why it is so important to paint a clear and accurate picture of your revenue streams in the form of a well-designed rent roll.

How to Create a Rent Roll

Here are five ways to ensure you have a clean rent roll:

Hire a Professional Bookkeeper or Accountant: They can help you organize your rent roll accurately.
Hire a Professional Property Manager: Look for one with reporting capabilities.
Use Property Management Software: Popular platforms like Appfolio and Buildium can generate detailed rent rolls.
DIY Using a Template: Create your own rent roll using the template we provided below.
Ask MFI Realty Advisors to Assemble It: Contact us today to schedule a time for a consultation. We can help you put together a professional rent roll in preparation for a sale.

Click the button below to download your FREE copy of our Rent Roll Template!