Glossary
Rent Roll
A rent roll is a schedule listing every unit or suite in a property with its tenant, lease start and end dates, current rent, deposits and other lease terms. It shows the contractual income a property is generating on a specific date and is one of the core documents in real estate underwriting and valuation.
Example
A 20-unit building's rent roll shows 18 occupied units at an average rent of $1,500 per month and 2 vacant units with an asking rent of $1,550. Physical occupancy is 18 / 20 = 90%. In-place rent is 18 x $1,500 = $27,000 per month, or $324,000 per year. Gross potential rent, including vacant units at asking, is $30,100 per month, or $361,200 per year, so economic occupancy is $324,000 / $361,200 = about 89.7%.
How it is used in underwriting
Underwriters use the rent roll to verify that income on the T12 is supported by actual leases and to project income going forward. For apartments, they analyze occupancy, rent by unit type, loss to lease against market rents, concessions and delinquency. For commercial properties, the rent roll drives a lease by lease analysis: expiration schedule, rent steps, renewal options, expense reimbursements, and weighted average lease term. Lenders typically compare the rent roll with leases, tenant estoppel certificates and bank deposits, because income on a rent roll is only as good as the leases and payments behind it.
Red flags include tenants listed as occupied but not paying, units leased to employees or related parties, large concessions not reflected in contract rent, many leases signed just before a sale, and rents well above market that may not renew. A rent roll is a point in time document, so pair it with the T12 and with historical rent rolls to see trends. Commercial rent rolls should also show lease expiration concentration: a single year in which many leases roll creates refinancing and vacancy risk that a strong current occupancy figure can hide.
Frequently asked questions
What should be included in a rent roll?
A complete rent roll lists each unit or suite, tenant name, unit type or square footage, lease start and end dates, current monthly rent, market rent, security deposit, concessions, balance owed and, for commercial leases, expense reimbursements, rent escalations and options. It should be dated and certified by the owner or manager.
How do lenders verify a rent roll?
Lenders compare the rent roll with signed leases, the T12 operating statement and bank deposit records, and for commercial properties often require tenant estoppel certificates. They look for discrepancies between contract rent and collected rent, related-party leases, and recent leasing activity that may have been arranged to inflate occupancy before a sale or refinance.
What is the difference between physical and economic occupancy?
Physical occupancy is the share of units or space that is leased and occupied. Economic occupancy is the share of potential rent actually collected, after vacancy, concessions, delinquency and below-market leases. A property can be 95% physically occupied but have much lower economic occupancy if many tenants are behind on rent.
Related terms
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