How to read a rent roll without being told a story

A rent roll is the least glamorous document in a deal and the closest thing to ground truth. Every unit, every tenant, every lease term, every rent. Nothing is modelled. It is a list of what is actually signed.

Which is exactly why the version you receive matters.

Start with what a complete one contains. Unit number and type. Current rent. Market rent, meaning what the owner believes the unit would fetch today. Lease start and end dates. Move-in date. Deposit held. Balance owed. Concessions granted. Whether the unit is occupied, vacant, on notice, or down.

Remove two of those columns and the same document tells a better story.

Concessions first. A unit leased at fourteen hundred dollars with one month free on a twelve month lease shows as fourteen hundred. The tenant is actually paying about $1,283 a month across the term. A building with concessions on a third of its units can show a face rent that nobody pays. This is an illustration, not a real property, but the mechanism is ordinary.

Balances owed second. A unit can be occupied, showing full rent, and collecting nothing for three months. Occupancy counts it as full. The income statement eventually does not.

Then there is the market rent column, which is the only number on the sheet that is an opinion. It is the basis for loss to lease, the gap between what units earn and what the owner thinks they could earn, and it is frequently the headline of a value-add story. Nobody signed anything to make that number true.

Lease expiration dates deserve their own look. If a large share of leases expire in the same two months, the property has a concentration of risk that no single line reveals. A building where forty percent of leases roll in January and February is a different building from one where they roll evenly.

Four things to ask for. The rent roll with the concessions column intact. The delinquency report showing balances by unit. A lease expiration schedule by month for the next twelve months. And the trailing twelve month operating statement to compare against.

That last one is the real test. The rent roll shows what should be collected. The trailing twelve shows what arrived. When they disagree, the difference has a name, and the next piece in this series is about it.

A rent roll rarely lies. It gets edited.

When you last reviewed one, did you see a column for concessions, or did you assume there were none?