A commercial real estate rent roll contains valuable information that a potential lender or investor will need to determine whether or not a rental property is worth the risk. The rent roll report is often the first document that is asked for. The amount of information a rent roll contains will provide lenders and investors with a substantial amount of information that they can use to make a wise decision. Knowing what information it contains will help you keep it up to date and accurate. The more accurate the document, the better it will be for individuals to use it to assess risk.
What Information Does a Rent Roll Contain?
A rent roll contains all of the necessary information for each tenant. In addition to the tenant’s name and unit number, a rent roll will also include the unit’s size, the amount of rent, and any other vital information that determines potential value. This includes any amenities and financial information that can be used to determine the income potential for each unit. Every unit is included in a rent roll, whether it is vacant or occupied. Most rent rolls come in the form of a spreadsheet, so the information is easy to read and maintain for accuracy.
Why Are Commercial Real Estate Rent Rolls So Important?
Rent rolls are essential for proving the value of a rental property when it comes to borrowing money or determining whether to invest in a property. All the information, including the length of each lease, list of tenants, etc., determines the viability of a rental property. Rent rolls are the key to performing due diligence for determining the financial security and profit and loss risk. Without this information, bankers and investors would have nothing to base their final decision on.
What Should You Do to Maintain an Accurate Rent Roll?
As a rental property owner, it’s extremely important to maintain an accurate rent roll. This means continually updating the document to maintain the highest level of accuracy possible. If the document is in the form of a spreadsheet, performing regular updates will be quick and effortless. Updating the document when a person moves out and another one moves in is the quickest way to stay on top of changes that need to be made. It’s also essential to document any changes in the amount of the lease and security deposit.
Rent roll documents are one of the most comprehensive collections of information when discovering the profitability of a rental property. Whether you are looking into buying a property or investing in one, having a rent roll document is the best way to determine if the investment is worth it. While it is important to perform other forms of research as well, using a rent roll document is one of the best tools for tying all of the information together.
Our experts at Brighton Escrow, Inc. have the answers when it comes to interpreting the information and making an informed choice. Call us today to schedule an appointment and learn more about rent rolls and how we can help you make a wise decision.