A rent roll is a claim, not a fact, until it's been checked against deposits, lease files, and the property's own history. Two decades of reading these documents across Michigan has taught us that the same twelve-line spreadsheet can hide very different stories depending on whether the building sits near a Detroit-area employer or a Grand Rapids university block.
What the Rent Roll Doesn't Tell You on Its Own
A billed rent figure and a collected rent figure are not the same number, and the gap between them tends to widen right before a seller decides to list a property. We pull bank deposit records and compare them line by line against what the rent roll claims, because a tenant listed at full rent who has actually been on a payment plan for six months changes the real income picture an exchanger is buying into.
Concessions get flagged the same way. A unit advertised at a certain rent but leased with two free months up front reads as full price on the rent roll unless someone checks the actual lease document, which is exactly the kind of detail that only surfaces during a real line-by-line review rather than a summary spreadsheet.
Lease Expiration Clustering Is a Bigger Risk Than It Looks
A rent roll showing strong current occupancy can still carry serious risk if half the leases expire within the same twelve-month window, which happens often in student-oriented buildings near Michigan State in East Lansing or the University of Michigan in Ann Arbor, where leases commonly run on the same August-to-August calendar. We build an expiration timeline for every replacement candidate so an exchanger sees concentration risk before it shows up as a vacancy problem a year after closing.
Reading Different Lease Types Correctly
Different property types require different rent roll checks:
- multifamily rent rolls, checked for concessions, delinquency, and unit-by-unit turnover history
- industrial and single-tenant net lease schedules, checked for escalation timing and reimbursement structure
- retail tenant rosters, checked for co-tenancy clauses and percentage rent reporting
- medical and professional office schedules, checked for assignment rights and specialty-specific terms
Seasonal and Related-Party Rents Need Extra Scrutiny
Properties near Traverse City sometimes carry rents that swing meaningfully between peak summer season and the off-season, which a single trailing-month snapshot won't reveal, so we ask for a full year of collections rather than a recent-month excerpt. Related-party leases, where a tenant has some connection to the seller, also get flagged separately, since those terms don't always reflect what an unrelated tenant would actually pay in that submarket.
The same caution applies to any lease signed unusually close to the listing date. A tenant who moved in a month before a Grand Rapids building went on the market hasn't established a real payment history yet, and treating that lease as equivalent to a tenant with three years of on-time payments overstates how dependable the income actually is.
Connecting the Rent Roll to Lender Underwriting and the Exchange Calendar
Lenders build their own income assumptions off the rent roll, and any gap between our findings and the seller's numbers needs to surface before the loan terms are locked in, not during underwriting the week before closing. We hand the reviewed rent roll, the arrears notes, and the expiration timeline to the investor's advisor and lender together so everyone is working from the same verified numbers as the identification deadline approaches.
Common 1031 Exchange Questions
What's the difference between billed rent and collected rent on a rent roll?
Billed rent is what the lease says a tenant owes each month, while collected rent is what actually came in, and sellers sometimes present a rent roll that reflects only the first figure. We cross-check against bank deposits so an exchanger isn't underwriting income that was never actually received.
Why do you build a lease expiration timeline instead of just checking current occupancy?
Current occupancy can look strong even when a large share of leases expire in the same window, which creates renewal risk that doesn't show up until a year or two after closing. Mapping expirations across the calendar surfaces that concentration before an investor commits.
How do you handle a rent roll for a property with seasonal income near Traverse City?
We ask for a full trailing year of collections rather than a single recent month, since a snapshot taken during peak summer season will overstate typical income and one taken in winter will understate it. The goal is a realistic annualized picture, not a best-case or worst-case month.
What is a related-party lease and why does it matter?
It's a lease where the tenant has some ownership or personal connection to the seller, which means the rent and terms may not reflect what an unrelated tenant in that submarket would actually pay. We flag these leases separately so they don't get treated as market-rate income without qualification.
Do you share the rent roll review directly with my lender?
Yes, when the investor authorizes it, we provide the reviewed rent roll and supporting notes directly to the lender and the investor's advisor so underwriting is based on verified figures rather than the seller's original presentation.
Should I be concerned about a lease signed right before the property was listed for sale?
It's worth a closer look rather than automatic concern. A brand-new lease hasn't built up a payment history, so we treat that income as less proven than a tenant with several years of on-time rent and factor that distinction into how we present the rent roll to the investor.
