How to Read a Multifamily Rent Roll
To read a multifamily rent roll, verify unit-level detail (unit, bedrooms/bathrooms, square footage), lease dates, in-place rent vs. market rent, concessions, tenant deposit, and renewal/move-out status for each unit.
Before you start
The rent roll is the single most important document in multifamily underwriting. Sellers can be selective about what they show. Here's what to actually look at.
What you need
- Current rent roll (Excel or PDF)
- Lease files for a sample
- Market rent comparables
Steps
- Step 01
Scan for basic completeness
Every unit should have: unit number, bed/bath count, square footage, current tenant name, lease start date, lease end date, current monthly rent, security deposit, and a status (occupied, vacant, notice to vacate, model).
- Step 02
Check move-in dates and concession exposure
Units with very recent move-ins (under 60 days) are likely to have unreported concessions ('first month free' is standard but often missing from the rent roll). Cross-reference against the T-12 concession line.
- Step 03
Compare in-place rent to current market asking rent
Market ask rent is on the property's website, Apartments.com, or CoStar for comps. Significant gap between in-place and asking rent signals either pro forma upside or the asking rent is fantasy. Verify with leased-over-the-last-90-days data.
- Step 04
Identify lease expirations in next 12 months
Count leases expiring in each of the next 12 months. Clustered expirations (e.g., 30% expiring in same 90-day window) is a lease-up risk. Well-managed properties ladder expirations evenly.
- Step 05
Flag notice-to-vacate and vacant units
How many units are currently vacant or on notice? Compare against T-12 average vacancy. A spike in vacant/notice units at the time of sale warrants investigation — sellers sometimes let units go at marketing time.
- Step 06
Spot-check against actual leases
Pull a sample of 10-15 leases and verify each matches the rent roll: tenant name, lease dates, rent amount, concessions, renewal terms. Sellers occasionally include assumed-renewed rents that don't match signed documents.
- Step 07
Analyze unit mix and rent per SF
Break out by floor plan type: how many 1BR vs 2BR vs 3BR, at what average rent, at what average rent-per-SF. This feeds pro forma and helps identify underpriced unit types.
- Step 08
Request historical rent rolls
Ask for rent rolls from 12 and 24 months ago. Compare vacancy trend, rent growth trajectory, and tenant turnover. The trajectory tells a bigger story than a single snapshot.
Common mistakes
- Treating pro forma rent roll as if it were current
- Missing unreported concessions and misreading economic occupancy
- Not verifying units against signed leases
- Overlooking renewal pricing gaps
- Ignoring one-time 'bonus' rent items that won't recur
Frequently asked questions
What is the difference between a rent roll and a T-12?
A rent roll is a unit-level snapshot of current leases, rents, and occupancy. A T-12 is a 12-month income statement showing actual revenue and expenses. You need both — the rent roll shows you the current state; the T-12 shows you how the property has actually performed.
How do I verify rent roll accuracy?
Cross-reference against signed leases for a random sample, compare against bank deposit records for actual rent collected, and request rent rolls from 12 and 24 months ago to see trend. Any significant discrepancies warrant deeper investigation.
What is 'economic occupancy' vs. 'physical occupancy'?
Physical occupancy is the percentage of units rented. Economic occupancy is the percentage of potential revenue actually collected after concessions, bad debt, and discounts. Economic occupancy is typically 5-10 percentage points below physical and is the more important operating metric.