Confession time: I used to ignore lease expiration dates on rent rolls. Big mistake. Now? They've changed the game for when I underwrite a property. Here's why: Lease exposure affects EVERYTHING: • Vacancy projections • CapEx budgeting • Rent growth assumptions • Cash flow stability My wake-up call? A property with 40% of leases expiring in one month. Ouch. Now I always: 1. Chart lease expirations from the rent roll 2. Identify high-risk periods 3. Adjust my underwriting accordingly For example: Higher vacancy reserves for peak exposure months. Result: More accurate projections, fewer surprises. Bonus: Lenders LOVE seeing this level of analysis. What underwriting blind spots have you discovered? #RealEstateInvesting #Underwriting #RentRoll #RealEstateAnalysis
Next big one: Lease termination/renewal/purchase options. If a tenant has a 10-year lease but can terminate at any time, do they really have a 10-year lease?!
Senior Analyst, Multifamily
1dAgreed! Expirations are important I’ve seen a few proforma models that actually assume more renovations in the first several months than there are expirations lol. Completely throws off income