As you start getting accustomed to commercial real estate, you will find out how technical the field can be. You may or may not be excited about it, depending on your relationship with data, but it is impressive.

Rent Roll is one of the most information-intensive parts of commercial real estate you’ll come across. Your commercial real estate broker will go over it for you, so you don’t need to worry about it. However, the document is so useful that you will appreciate a well-maintained rent roll nevertheless.

Before getting into why the document is significant, let’s first explore what it is.

What Is a Rent Roll?

A rent roll is a document that lists current rental income from a property irrespective of its property type. The property can be a multifamily building, office building, mall, hotel, etc. The document also contains tenant details because all income-related information is needed.

This data, along with historical income trends for the property, help determine the overall net operating income, return on investment, cap rates, etc., all of which are crucial for computing the viability of the property as a commercial real estate investment.

Information Typically Expected in a Rent Roll

While the rent information is the key purpose of a rent roll, the document also includes the following information to facilitate people who need it to make a decision.

  • Property details (ownership, address, property type)
  • The property’s location
  • The property’s size
  • Division labeling details (in case of multifamily and office buildings, malls)
  • Number of rooms and categorization of room types
  • Any amenities
  • Details for each tenant (payment history, lease agreement, etc.)
  • Total rent collected monthly
  • Total rent collected annually with surcharges

Above is a list of information a good rent roll contains. If the seller does not prepare a comprehensive rent roll for the commercial real estate, you can request it as a pre-requisite to making the final decision.

Who Uses Rent Roll Information

There are several people whose jobs become uncomplicated when they have a detailed rent roll to work with.

1. Commercial Real Estate Investors

As a commercial real estate investor, having comprehensive documentation in the rent roll will help you assess whether the property has the earning potential you are looking for.

2. Property Buyers

Property buyers, like investors, look at the information to determine how well it fits their conditions for purchase.

3. Property Owners and Managers

Owners, in contrast, use the information to keep an updated and organized record of rent income. The managers need it for the same reason as owners and reporting purposes.

4. Commercial Real Estate Brokers

A thorough rent roll helps commercial real estate brokers like CHRE evaluate how lucrative property is and how well-matched it is to client preferences. While we have other ways of getting the results, rent roll makes the process more efficient.

In a Nutshell

Overall, if you are a commercial real estate buyer or investor, requesting a rent roll will simplify your life. When you have been in the industry for long enough, you will also be able to compare rent rolls and get an idea about which property fits your requirements more.

If you are considering commercial real estate investment or purchase in Rio Grande Valley, please contact our team. The CHRE team has years of experience in the field, and we will help you shortlist the best options.