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

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Description

Do you know all the elements of a rent roll? This book is intended for those who are on the verge or in the throes of buying income-producing property. One of your foremost tasks in the acquisitions process is to validate contractual rental revenue. Rental revenue is provided to prospective investors under the terms of a confidentiality agreement. 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 only: 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. Read more

Publisher ‏ : ‎ WIN Publising


Accessibility ‏ : ‎ Learn more


Publication date ‏ : ‎ September 18, 2013


Language ‏ : ‎ English


File size ‏ : ‎ 8.8 MB


Screen Reader ‏ : ‎ Supported


Enhanced typesetting ‏ : ‎ Enabled


X-Ray ‏ : ‎ Not Enabled


Word Wise ‏ : ‎ Enabled


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Top Amazon Reviews


  • I bought for a friend in the business
I've been in multifamily for 15+ years and I'm amazed at how we as profession so often overlook the basics. As this author proves, the rent roll is the foundation upon which we make our multifamily investment decisions. It's a simple yet complex tool of the business. I bought this book for a new hire but as I started reading it, I found it hard to put down as it 'rounded out' my own knowledge. It is easy to read and uses every day examples to drive home the importance of business points being made. One key takeaway for me was to really ask oneself about the decisioning inputs that go into 'the credit quality of the income stream' as presented on a rent roll. People are starting to pay dumb money again for apartments and if they don't scrub the rent roll, they will get burned. In all my years buying and selling property no one has ever asked to see my declined rental applications. Evidence of this would indicate good quality of the rent roll as selectivity was in place by the application screeners. This book also makes some good common sense points like, 'how close is the sum of the rent roll to the actual rent shown as collected on the income statement and tax returns.' I was surprised to find such a niche book on Amazon and I think it has broad appeal to beginners and experts alike in multifamily housing. ... show more
Reviewed in the United States on October 16, 2013 by Brent Sobol

  • Reference Guide
This book is the general guideline for all investors, property managers, commercial brokers, and accountants. It should be kept on the shelf in your office, being used everyday. This book is practical and keeps focus on understanding the cash flow that is truly coming in. If you are uncertain, be certain in purchasing this book for your future. Now, there is a few typos but if you are a book critic than this book will make you cry. If you care about the value this book can bring and can ignore a few misspelled words, than I welcome you to the real way of analyzing the rent roll. ... show more
Reviewed in the United States on December 29, 2018 by Julian

  • it's a great book and if you're in the RE industry you ...
I run a property Managment office in Nyc for the past 5 years or so and I was completely blown away by the method in which John Wilhoit introduces valuing a revenue stream such as a rent roll. After reading, I was immediately able to apply the RRT to all the buildings we manage and within a couple of days develop plans to increase value to our rent rolls. All in all, it's a great book and if you're in the RE industry you only stand to gain from this read. ... show more
Reviewed in the United States on June 1, 2017 by Victor S.

  • Must Read!
Great book! Easy to understand and actionable information. I would recommend anyone read this book in the real estate industry. Will save you time and potentially thousands of dollars in mistakes. Worth the money for the last chapter alone.
Reviewed in the United States on July 18, 2014 by josj

  • Great Apartment Investment Book - I Couldn't put it Down!
This was a very refreshing book that gave great insight into the process of buying and selling an apartment community. I have been in the business for 18 years and honestly couldn't put it down and probably can't sell due to my many notes left on the pages. If you are looking for an apartment investment book that doesn't spend a lot of time on fluff and gets right to the heart of the matter, this is the book for you! I have made many changes in our acquisition process and management process from the pages within. ... show more
Reviewed in the United States on December 1, 2014 by M

  • Great Qualitative and Quantitative Analysis of Apartment Performance
Outstanding qualitative discussion of the valuable data buried in a rent roll that many investors fail to interpret. Even more powerful was the rent roll triangle formula that actually quantifies the leasing performance of an apartment building. Great case studies make application to real world deals easier, too. I've spoken with many other veteran investors who've not explored this innovative metric and they are keen to learn and use it. Looking forward to reading more from John Wilhoit! ... show more
Reviewed in the United States on June 23, 2015 by David

  • The side of real estate investing not taught.
This book is a book that can be used and reused over and over. Understanding the nuances of reading a rent roll is a vital topic BEFORE you decide to venture into multi-family investing. Ironically, I had a call with a major real estate developer YESTERDAY and 80% of the phone call was focused on the numbers taught in this book. It's a competitive advantage. ... show more
Reviewed in the United States on February 10, 2017 by Michael H.

  • RE: Decent book on rent roll analysis
The author does a good job of stressing the importance of scrutinizing the rent roll. However, he falls short in fully describing and explaining the rent roll triangle. I believe he has written another book on just that subject so perhaps he was reserving full discussion for that book. Overall, I think it is a good book for a new investor. ... show more
Reviewed in the United States on December 15, 2018 by John

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