What a rent roll should show
A rent roll is a snapshot of every unit in the building on a specific date. On a 5-10 unit building, a useful one has a row per unit and, at minimum, these columns:
- Unit number and type (efficiency, one-bedroom, two-bedroom)
- Tenant name, or "vacant"
- Lease start and end date, or "month-to-month"
- Current contract rent
- Security deposit held
- Any concession, discount or rent credit
- Balance owed (delinquency)
- Any other monthly charges, such as utility bill-backs, pet rent or parking
If the seller sends a single number ("the building brings in about nine grand a month"), ask for the unit-by-unit version. Lenders will require it, and the details are where problems hide.
Step 1: Match every row to a lease
Request a copy of every current lease. For each unit, compare the tenant name, rent, lease dates and deposit with the rent roll. Common mismatches on small Texas buildings:
- The lease shows a lower rent than the rent roll, because the seller recently "raised" rent but the tenant never signed an amendment
- The lease expired years ago and the tenant is month-to-month, which may be fine but should be shown as such
- A unit shown as occupied has no lease at all, or the occupant is a relative or a caretaker paying little or nothing
- Deposits on the rent roll do not match the deposits in the leases
Underwriters use the lower of what the lease says and what the tenant actually pays. If the rent roll and the leases disagree, the leases usually win.
Step 2: Tie rents to bank deposits
Ask for several months of bank statements for the account where rent is deposited, or the property manager's owner statements. Add up the rent actually collected each month and compare it with the rent roll total. A gap means vacancy, delinquency, concessions or cash rent the seller does not deposit. Whatever the reason, the lender will size the loan on collected rent, not on the rent roll's total.
This is the single most useful check you can do. It takes an hour and it often changes the price you should pay.
Step 3: Look for concessions and delinquency
Concessions, such as a free month or a reduced first-year rent, are common when a building competes with newer complexes. They reduce effective rent, and lenders adjust for them. Delinquency is more serious: a tenant who is several months behind is not really income. Ask the seller to explain every balance owed, and expect the lender to treat long-delinquent units as vacant.
Step 4: Compare rents with the market
Look at what comparable units nearby are leasing for. If the building's rents are well below market, there may be upside, but the lender sizes the loan on today's leases, not tomorrow's. If the rents are well above market, ask why. A building with above-market rents and short leases may see rents drop at renewal, and the appraiser's market rent estimate may come in lower than the rent roll.
Step 5: Check lease timing
Note when each lease expires. If several leases expire in the same month, you may face a cluster of turnovers right after closing. Near Texas universities, many leases follow the academic year, so a rent roll taken in early summer will look emptier than one taken in the fall. Ask for a rent roll from the same point in the prior year for comparison.
Step 6: Account for other income carefully
Utility bill-backs, laundry, parking and pet fees can be real income, but lenders look at them skeptically unless they are documented in leases and show up consistently in deposits. Utility reimbursements in Texas apartments must also follow state rules on submetering and allocation; see master-metered utilities and DSCR.
What a clean rent roll does for your loan
When the rent roll, the leases and the deposits all agree, the lender and the appraiser can rely on the income, and the file moves faster. When they disagree, the lender uses the lowest supportable figure, which can reduce the loan amount. Do this work during your option period, then run the building's numbers in the 5-10 unit DSCR calculator using collected rent.
Questions investors ask
What is a certified rent roll?
A rent roll the seller signs, stating that it is accurate as of a specific date. Lenders often require one on small apartment purchases.
Do lenders count month-to-month tenants?
Often, yes, if the tenant has a history of paying. Some programs prefer most units on longer leases, so a building that is mostly month-to-month can narrow your choices.
Should I trust a rent roll from a property manager?
It is usually more reliable than a self-managed owner's spreadsheet, but still check it against leases and owner statements.
This guide summarizes Texas rules generally and is not legal or tax advice. Figures are illustrations using user-style inputs, not loan offers. Nothing here is a commitment to lend.