The rent roll is the seller’s list of every unit in the building, who lives there, what they pay and on what terms. It is the starting point for the income side of your underwriting, and it is also where the most useful questions come from. A rent roll that looks tidy at a glance can hide vacant units counted as leased, rents that are well below market, or deposits that do not match the leases. This guide shows what to look at, line by line, and what to do when something does not add up.
What a complete rent roll should include
| Column | What to check |
|---|---|
| Unit number and type | Every unit in the building appears once; unit mix matches the listing |
| Tenant name or occupied/vacant | Vacant and down units are marked, not left blank |
| Current rent | Matches the lease and recent bank deposits |
| Market rent (if shown) | Is the seller’s estimate, not a fact; compare with nearby listings |
| Lease start and end | Month-to-month vs. fixed term; recent move-ins |
| Security deposit | Amount held and whether it transfers at closing |
| Concessions or credits | Free rent, discounts or reduced rent for work |
| Balance owed | Unpaid rent and how old it is |
Add it up yourself
Total the current rent column and multiply by twelve. That is gross scheduled rent at today’s rents. Now compare it with the collected rent in the seller’s trailing twelve months, the income statement for the last year. If collected rent is lower, the difference is vacancy, concessions, bad debt or units that were only recently leased. If it is higher, rents may have dropped, or the rent roll may be missing a unit. Either way, the gap needs an explanation before you rely on either number. Our guide to How to Review a T12 Before You Buy an Apartment Building covers the other side of that comparison.
Signs worth a closer look
A cluster of recent move-ins
If several units were leased in the last few months, ask whether they came with free rent or other concessions and whether the rents are sustainable. A building filled just before listing can look fully occupied without having proved that tenants stay at those rents.
Rents that are all the same
Real rent rolls are uneven: long-term tenants pay less, recent tenants pay more. A roll where every one-bedroom rents for exactly the same amount may show asking rents rather than actual ones.
Units rented to people connected to the owner
A manager’s unit, a relative’s unit or a unit rented at a discount in exchange for maintenance work is common in small buildings. It is fine, but it needs to be modeled at the rent you would actually receive after closing, and the arrangement may end with the sale.
Large balances owed
Old unpaid balances are rarely collected in full. Treat them as a sign of collection problems rather than as income.
Rent that is below market is not free money
A seller may point to a column of market rents and describe the difference as upside. In Seattle, that upside is slower and more constrained than it looks. Washington limits most annual rent increases, Seattle requires long written notice before any increase, and tenants cannot simply be moved out to reset rents. Some of the gap may close over several years; some may never close while current tenants stay. The rules are summarized in Washington’s Rent Increase Limit and What It Means for Your Projections and Seattle Landlord Rules to Price In Before You Buy.
Questions to send the seller
- Can you provide copies of all current leases and any amendments?
- Which units have concessions, credits or reduced rent, and when do they end?
- Which units are vacant or offline, and why?
- What deposits are held, and will they be transferred at closing?
- Are any tenants on payment plans or behind on rent?
- Have any rent increase notices been served that take effect after closing?
- Which units have had increases in the last twelve months?
Tip: Ask for bank deposit records for the last few months as well. Matching deposits against the rent roll is the fastest way to confirm that tenants are paying what the roll says they pay.
Deposits and prepaid rent at closing
Security deposits belong to tenants, so the buyer takes over the obligation to return them. At closing, deposits are usually credited to the buyer, along with any rent tenants have prepaid for the period after closing. Confirm that the deposit column on the rent roll matches the deposits held and that nothing is missing.
Turning the rent roll into your income line
Once the roll checks out, build gross scheduled rent from actual current rents, not market rents. Apply a vacancy and credit-loss allowance based on the building’s history, as explained in Vacancy, Concessions and Loss to Lease: The Gap Between Rent and Income. Add other income only where it is collected today. That total, effective gross income, is the top line of your NOI. Everything below it depends on getting this number right.