05 Jul CREPN #151 – Value Add Quick Calc use Rent Roll Triangle with John Wilhoit
The Rent Roll Triangle is a simple underwriting calculation to determine if the property has potential for a value add strategy. [x_audio_embed][/x_audio_embed] John Wilhoit is an experienced asset manager. He takes us through how you can utilize the rent roll triangle so you can determine how the current income of a property compares to its potential.
What is the Rent Roll Triangle?The rent roll triangle compares the collected rent to the gross potential rent to determine how the property is currently performing against its potential. Once calculated, you will know if there is an opportunity to increase the rents. If you are looking in a particular market, you can look at multiple properties to determine which property to submit a letter of intent on. Numbers needed to calculate the Rent Roll Triangle:
- Gross Potential Rent
- Stated Leases
- Collected Rent
- Average Term of Lease