Guide
Rent Roll vs. T12 and How to Reconcile Them
Team RE Underwrite Lab
A rent roll shows a property’s tenants, leases and rents as of a particular date. A T12, or trailing 12-month operating statement, reports income and expenses for the last 12 months covered by the statement. Compare them to see where current lease terms differ from the property’s operating history.
What each document tells you
| Question | Rent roll | T12 |
|---|---|---|
| Which period does it cover? | A dated snapshot | A 12-month period |
| What should you look for? | Unit, contract rent, lease dates, occupancy and concessions where listed | Rental income, other income and operating expenses, ideally broken out by month |
| What should you verify? | Executed leases, move-ins, concessions and unpaid balances | Cash or accrual accounting, one-time items and gaps in expense records |
Reconcile the gap before projecting next year
Say a 10-unit rent roll shows nine occupied units at $1,000 a month each. Annualizing current scheduled rent gives $108,000. The T12 shows $99,000 of rental income. That $9,000 difference is a question to investigate. On a cash-basis statement, older rents, historical vacancies, concessions or late collections could account for it.
Ask for the monthly ledger and lease changes, then match each explanation to the period it affected. If two leases increased recently, use the dates the higher rents started. If balances remain unpaid, carry a collection-loss assumption into the pro forma. Keep the vacant unit on a separate line and model when it could realistically start generating rent.
Keep historical and projected NOI separate
If the $99,000 of historical rental income is the only operating income and the T12 shows $43,000 of operating expenses, historical NOI in this example is $56,000. A projected NOI needs its own rent, vacancy, collection and expense assumptions. Review whether taxes, insurance and management costs are likely to differ under new ownership. Show lender-specific adjustments separately if you are comparing your model with a lender’s. OCC Commercial Real Estate Lending handbook
Enter documented rents and your own expense assumptions in the RE Underwrite Lab multifamily calculator. Keep the original T12 totals beside your projections so a partner can trace what changed. Then calculate the rental income needed to break even.
Example only. Not financial, investment, legal, tax, lending, or appraisal advice.
Estimates only. Not financial, legal, tax, or investment advice. RE Underwrite Lab calculators and PDF reports provide educational estimates based on the numbers you enter. Actual purchase costs, rents, expenses, financing terms, taxes, insurance, vacancy, rehab costs, refinance eligibility, and returns vary by property, market, lender, and local law (including short-term rental rules). We do not guarantee any outcome, profit, cash flow, or appraisal. Some content and tools may be generated or assisted by artificial intelligence and can contain errors. Always verify assumptions with licensed professionals and your own due diligence before making decisions.