Rent Roll Explained [+Templates]

May 10th, 2021
Rent Roll Explained [+Templates]

Rent roll is an essential document that every landlord needs to manage and keep fresh. Rent roll helps landlords track when individual tenants’ rent is due and when it has been collected.

Furthermore, rent roll is a key document for potential property investors. It acts as your property’s rental portfolio. Continue reading for more detailed information on rent roll and click here for a rent roll template to calculate how much rent to charge both renewing and new tenants.

What is Rent Roll?

Rent Roll is an important document that provides detailed information about tenant and unit changes month over month (MoM) and year over year (YoY).

A rent roll gives both landlords and prospective investors or lenders an overview of each unit and how the property’s overall performance. If a real estate investor is considering investing in your property, he or she will want to know the profit ratios, which will be apparent in the rent roll.

Note, a rent roll outlines gross income and typically does not trace expenses or mortgage payments, those should be in a separate document, known as a lease ledger.

How Does Rent Roll Work?

A rent roll spreadsheet provides details on rental units such as the unit number and current lease details. By having the individual unit and lease changes in one document, a rent roll serves as an easy way to get a snapshot of the gross rental income on a property.

Furthermore, by having a digestible and easy-to-follow spreadsheet, landlords don’t have to take the trouble of locating and reviewing each tenant’s lease to induce the rent amounts or lease start and end dates.

Rent Roll Templates

In the below Google Sheets and Excel rent roll spreadsheets, you will find templates that can be easily adjusted to fit your property’s needs. We recommend making your own copy from these templates to use as your own.

In the below Google Sheets and Excel rent roll spreadsheets, you will find templates that can be easily adjusted to fit your property’s needs. We recommend making your own copy from these templates to use as your own.

google-sheet-rent-roll-template

The Google Docs template contains rent roll elements that you can modify for your needs by clicking File > Make a Copy.

microsoft-excel-rent-roll-template

The Microsoft Excel template contains rent roll elements that you can modify for your needs by clicking File > Save As.

You should update your rent roll spreadsheet anytime significant changes to units or the general property occur. For instance, if a tenant renews a lease or a change in rental rate occurs or a tenant is moving out early, thus creating a new vacancy, make sure to chart down these changes in your rent roll document.

Components of a Rent Roll

A rent roll can have lots of different elements depending on how much information you want to keep track of and your ability to update as needed. Below are some components to consider having in your rent roll.

  • Property address: The property’s address listed on tax forums and lease agreements.
  • Unit number: The unit number should match the exact number on the lease agreement, such as 101 or 2B.
  • Square footage: The livable square footage of a unit helps compare rent prices across a complex.
  • Type (number of beds and baths): To help determine if you’re receiving the fair market rent or value for different unit types such as studio, 1BR 1BA, 2BR 2BA, etc.
  • Lease start date: The date the lease began and when the first rent payment was collected.
  • Lease end date: The date the lease ends or the date the lease becomes month to month.
  • Security deposit collected: The amount collected for the security deposit.
  • Rent collected: Rent collected each month for the lease period.
  • Annual increase: The difference in per-month rent from the previous one-year lease agreement.
  • Pre-model: The amount of rent charged before a remodel.
  • Post-model: The amount of rent charged after a remodel.
  • Monthly difference: The difference in a unit’s monthly rent if differences exist.
  • Additional tenant expenses: Other expenses that the tenant is responsible for paying such as utilities or specific building maintenance.
  • Additional unit information: This is a note section for the landlord to enter comments such as scheduled rent increases or scheduled and completed renovations.

Again, it is important to have this information in one place. It’s easy to update, review, and can be used to track both unit and property changes and rental income.

How to Verify the Accuracy of a Rent Roll

As a landlord, you want to keep the information on your rent roll accurate and up to date not only for your internal purposes but also because investors might be suspicious or wary of your rent roll’s accuracy. For rent rolls, an element of trust exists between the preparer (landlord) and the recipient (investor or lender).

One way for real estate investors to verify the accuracy of a rent roll is to compare both the vacancy rates and rent amounts with market averages. If the numbers are either lower or higher than comparable properties in the neighborhood, the soundness of the rental might be in question.

Another way investors or lenders can verify the rent roll’s information is by requesting the seller’s tax return or a Schedule E, in the case that the property is reported in the owner’s personal tax return. From the tax return or Schedule E, an investor can verify the total rents received in the most recent tax year.

Other Uses for Rent Roll

A detailed rent roll can be a useful tool for government agencies or appraisers to formulate a property valuation. Moreover, landlords can use their rent roll to evict tenants who have or are not paying rent. Landlords can also use their rent roll as a tool to help compute the rental rate changes following renovations and fluctuation in the market rate.

Also, landlords should use the rent roll templates to better understand their apartment complex or property as an investment portfolio. If prepared and kept up correctly, a rent roll document will make it easy to quickly find essential information.

For more streamlined processes check out our tenant screening and rental application software.

Key Takeaways

  • A rent roll features key information about each unit and tenant in a rental property so it can be viewed in one place.
  • An up-to-date rent roll plays a critical part for investors or lenders considering buying or investing in the property.

Rent Roll FAQs

You might have a few questions beyond what rent roll is and how it can be best used. Here are some common questions and answers about rent roll spreadsheets and their use.

What’s the Difference Between Rent Roll and a Lease Ledger?

A lease ledger, also known as a rental ledger, is a detailed financial tool that tracks revenue, tax payments, mortgage payments, and other miscellaneous property expenses.

A rent roll provides a bird’s eye view or snapshot of the property’s finances via unit-specific changes, while a lease ledger gives more detailed information and data on a property’s finances.

Do Tenants Need to Create a Rent Roll?

No, tenants do not need to create a rent roll report since the main purpose of a rent roll is for investment purposes.

Tenants can and often should create a lease ledger that tracks their rent payments including the month, payment date, and amount. This information can help with any disputes that might arise between tenants and landlords.

How do Residential and Commercial Rent Rolls Differ?

A rent roll is essential for both residential and commercial properties since they are a basis for understanding a property and give a quick snapshot of current and previous leases.

The main difference between residential and commercial rent rolls is the information provided. A residential rent roll will focus on different units. A commercial rent roll typically has longer leases and terms with more focus on square footage.