The rent roll of your commercial real estate is one of the most important documents of your property. This document can help you or anyone who knows all the financial details of your property and decide upon its profitability and income range. However, many times landlords don’t know how to properly utilise their rent roll, and that harms the profitability of their business.
The rent roll, or rather a good rent roll, is a major interest point for an investor to consider investing in your property. So if you are looking for an investor, keep reading as your rent roll can be the secret to investors lining up outside your door to invest in your property. Let’s look into rent roll and how it can be utilised correctly to attract investors.
It’s a document that is used to monitor the income and expenditure of any commercial real estate. It is calculated on a yearly basis using the data provided by the landlord on a monthly basis. The data includes the income of the property per month and the rent history of the property. Using this data, investors can figure out the profitability of a business and make decisions on whether they want to invest in the property or not.
The rent roll also includes various other data about the maintenance of the property for each tenant and as a whole. It also includes information about if the rent is paid on time by the tenants or not. All of this data cumulatively is used to determine the profitability of the property.
To ensure that your property has a good rent roll, you have to learn to look at some problems in your property and make sure you deal with them accordingly. This will help you keep your rent roll positive, which will always reflect nicely with investors. Here are some of the common problems you might face that you need to address in your own ways.
As a landlord, you would ideally want your tenants to pay their fair share of rent on time every time. However, sometimes tenants fail to pay out their rent on time, and that is somewhat excusable. However, if you find your tenant or tenants are repeatedly delaying their rent payment or partially paying their rent. It might be a very bad sign for your rent roll and its appeal to investors.
If you have repeated maintenance calls on your property, it will inevitably increase the maintenance cost of your property, which will reflect poorly on your rent roll. So, if you are facing this issue, be sure to deal with it in the best way possible because maintenance cost plays a vital role in deciding the profitability of your property.
Maintenance is a regular property cost that is expected and does not cause any issue with your rent roll if they are taken care of and are sporadic in nature. However, in case your property has repeated expenses over issues that are not in the control of the owner or tenant, it can show the neighbourhood of your property in a bad light. Some common issues include property damage and stolen mail. These issues need to be handled by you to ensure investors consider your property a safe investment.
Once you look into the issues mentioned in this article, you will be able to improve your rent roll and make it lucrative for investors. Having additional investment in your property will again help you improve the income potential and grow your CRE.