How To Read A Rent Roll: A Guide to Understanding Rental Income

by John Wilhoit Jr.

Do you know all the elements of a rent roll? This book is intended for those on the verge or in the throes of buying income property. In the acquisitions process you must validate contractual rental revenue. The seller will provide you with certain financial data, including the rent roll, for your inspection during the due diligence period; it is up to you to validate this information. Buying rental property is not an impulse purchase. The acquisition process is a significant time commitment and one that can be very rewarding. As a prospective buyer, you need to know how to build, understand and use the rent roll to your advantage. This book is a technical guide to rent roll analysis. The objective here is to narrow your attention to one thing and one thing estimating the validity, or reliability, of contractual rental revenue collected from income property. Why is this important? Because getting it wrong undermines any and all further work performed towards the goal of estimating Net Operating Income (NOI). If the revenue number is suspect, over-reported, under-reported or credit quality is without support, then what’s the point of devoting energy, resources or dollars to completing the rest of the equation towards NOI? Without a solid foundation based on valid rental income the balance of your due diligence is an exercise in futility.

178 pages, Paperback

First published September 18, 2013

Reviews

[Arie van Gemeren · Rating 4 out of 5]

It was alright - probably a bit too much of repeating but I did find the fundamentals useful as a review. The last chapter for assigning efficiency and maximal potential for properties was great. Also I found the notion of evaluating the credit quality of a rent roll to be a unique look at multi family. Overall would recommend it.

[Chase Packer · Rating 2 out of 5]

A lot of fluff. He explains something and then re-explains it many times over. The title of this book should be called "how to beat a rent roll with a dead horse." The book could have been a quarter of what it is. He also purposefully uses verbosity to the point where you wonder if he was trying to out due himself in every line of the book with grossly inflated vocabulary. The only good chapter is the last, in which he presents a modified version of economic vacancy that can be used to screen deals.