Common rent roll mistakes by landlords can significantly reduce what buyers will pay for your building. This guide identifies the documentation errors that hurt property values most.
Why Clean Financials Are So Important
For most buyers and lenders, avoiding rent roll mistakes as a landlord is critical because an apartment building is a stream of income, not just a structure. If your rent roll and T-12 are incomplete or inconsistent, buyers:
- Assume the worst about missing data
- Underwrite conservatively
- Lower their offer or walk away entirely
Common Rent Roll Mistakes
- Missing move-in dates and lease terms
- No record of security deposits
- Inconsistent or unclear concession history
- Using nicknames instead of clear unit identifiers
A strong rent roll should show, at a glance, who pays how much, since when, and under what terms.
Common Expense Reporting Problems
- Mixing capital expenditures with operating expenses
- Unexplained spikes or drops in certain line items
- Missing categories like management, reserves, and professional fees
- Cash expenses with no receipts or explanation
How Sloppy Financials Lower Your Building’s Value
When buyers can’t trust your numbers, they:
- Underwrite higher expenses and lower income
- Demand price reductions during due diligence
- In some cases, choose to buy another, cleaner deal
How to Clean Things Up Before Selling
- Start organizing digital copies of leases and addenda
- Build or update a clear rent roll and T-12 (your broker can provide templates)
- Work with your broker and accountant to categorize expenses correctly
Request a valuation and I can help you identify what needs to be cleaned up before going to market.
Quick FAQs
Q: Do I need professional bookkeeping to sell?
A: Not required, but a well-organized spreadsheet goes a long way toward building buyer confidence.
Q: Can I fix my financials after going to market?
A: Yes, but it’s far better to do this before launching so your first impression is strong.
Avoiding rent roll mistakes as a landlord starts with proper record-keeping long before you decide to sell. Contact me for a review of your financials before going to market.