On any leased property, and particularly on multi-unit ones, documented income is what separates a strong file from one relying on estimates. The rent roll is the core document.
These questions cover what it should contain and how lenders use it.
Quick answer
A rent roll lists each unit with its rent, lease dates, tenant, deposit, and payment status. It is standard on multi-unit properties and supports using actual lease rent rather than an appraiser's market estimate.
Frequently Asked Questions
What is a rent roll?
A schedule listing each unit in a property along with the current rent, lease start and end dates, tenant name, security deposit held, and payment status.
When is a rent roll required?
Standard on two-to-four unit and larger properties. On single-family rentals, the lease itself usually suffices, though payment history may still be requested.
What should a rent roll include?
Unit identifier, tenant, monthly rent, lease term dates, deposit amount, payment status or arrears, and any concessions or special terms.
Who prepares it?
The owner or property manager. On a purchase, the seller provides it and you should verify it rather than accepting it at face value.
How do I verify a seller's rent roll?
Request actual leases and bank deposit records. A rent roll is an assertion; leases and deposits are evidence. Discrepancies between them are a warning sign.
What is the most common rent roll problem?
Stated rents that do not match actual leases or actual collections. Sellers sometimes present asking rents or aspirational figures rather than what tenants pay.
Does the lender verify the rent roll?
Underwriting typically compares it against leases and sometimes bank statements. The appraiser also independently assesses market rent.
What if the rent roll and leases disagree?
Underwriting will generally rely on the leases and may question the file. Resolve discrepancies before submission rather than letting them surface later.
Do I need payment history too?
Frequently. Bank statements or a property management ledger showing rent actually collected substantiate the rent roll considerably.
What about a unit in arrears?
Disclose it. A delinquent tenant affects the income analysis and hiding it damages credibility if discovered.
How current does the rent roll need to be?
Typically dated within 30 days of submission. If your closing timeline extends, expect a request for an updated version.
What about concessions like free rent?
Disclose them. A unit at $1,500 with two months free is effectively producing less annual income, and underwriting will want to know.
How are security deposits handled?
They should be listed and, at closing on a purchase, transferred to you as the new owner per state law. This is a closing item worth confirming.
What about month-to-month tenancies?
List them as such. Some lenders view term leases more favorably, though month-to-month arrangements are generally acceptable.
Do I need to provide tenant information?
Names and lease terms typically. Detailed tenant financial information is not usually required for DSCR underwriting.
What if a unit is vacant?
Note it as vacant on the rent roll. The appraiser's market rent opinion would typically apply to that unit.
Does a property manager's report suffice?
Usually yes, and a management company ledger is often stronger evidence than an owner-prepared schedule since it is a third-party record.
How does the rent roll affect my ratio?
Directly, where the lender uses lease rents. It establishes the income side of the calculation on a leased property.
What documentation strengthens a file most?
A rent roll supported by executed leases and bank deposits showing collection. That combination is difficult to dispute.
What should I do before buying a tenanted property?
Verify the rent roll against leases and deposits, review lease terms for anything unusual, and confirm deposit handling and any pending tenant issues.
