Determining rent rolls from MLS?

4 Replies

I've been looking for a multifamily in the Portland, Oregon area and browsing the listings on realtor.com, and some of them have an "actual gross income" value in the info. Should I take that as the annual rent roll when determining if I want to look further into the property?

I'm trying to buy using an FHA loan and they need the PITI to be less than 85% of the market rent for the property and I'm having trouble figuring out if a property will meet that at first glance.

You're thought process is correct in, yes you should be able to take the actual gross income and divide by twelve. But it's based on what the realtor inserts for rent. This value is really a variable. It could be current rent or their opinion of market rent because of vacant units and/or no recent market rent history to show/prove. There should be a monthly rent reported for each unit, although that's not always filled out. When it is filled out its subject to the same variables discussed above. So look for both annual gross as well as monthly rent per unit. Then read the comments for editorial regarding the reported numbers. 

Hope this helps

Never trust pro forma!  Get old leases/tax records/receipts.  If you can't get that, use a conservative estimate for rents compared to what is standard in the area.  You can use sites like zillow.com or rentometer.com.  Good luck!

@Frankie Woods  is spot on. I would get copies of the leases and statements showing the deposits. If you want to check market rents I find the easiest way is to search on craigslist  I just search like rentals, same # of beds and baths and similar amenities and then add them into an excel spreadsheet. Once I have about 10-15 I take the average and it gives you a good idea of what the property should be able to get. 

on smaller buildings like this one. 4 units or less it can really be a crap shoot to what information if any is on the listing. Agent may have no idea what rents were collected. Many times the owner doesnt even know.

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.