Home › Guides › Real estate › Cash basis or rent roll
A T-12 from bank statements: cash basis, or rent from the rent roll?
Bank statements show the money that came in and went out. They don’t show the rent that was due, the units that sat empty, or the tenants paying below market. A rent roll does. Here’s what each kind of T-12 tells you, and what to watch when you combine them.
Checking it takes real work. A T-12 that takes its rent from the rent roll has to agree with the rent roll unit by unit, and still come down to the rent the bank shows was collected, month by month. Any unit read wrong, or any month matched to the wrong rent roll, and the vacancy and loss to lease are wrong while the totals still look normal.
A cash-basis T-12
Built from the bank statements alone, a T-12 shows each month’s rent as the money that arrived that month. It’s the truest record of cash, and it’s all you can build when there’s no rent roll.
What it can’t show: why rent was what it was. A low month could be vacancy, a tenant paying late, or a concession. A high month could be a tenant catching up. The bank only shows the deposit.
Rent from the rent roll, everything else cash
With a rent roll, the rent can be shown the way underwriters read it:
- Gross potential rent: every unit at its market rent.
- Loss to lease: what occupied units pay below their market rent.
- Vacancy: the market rent of the empty units.
- Non-revenue units and concessions: models, offices and staff units, and rent given away.
- Collection loss and timing: the difference between the rent that was due and the rent the bank shows was collected.
The last line is what keeps it honest. However the rent is broken down, it comes down to the rent that actually arrived. Expenses stay on a cash basis, as the bank shows them.
One rent roll, or one for each month
A rent roll shows a single day. A rent roll from each month-end gives each month its own vacancy and loss to lease. With only one, that one is applied to every month, and the months it doesn’t cover should be marked as estimates, so nobody reads them as fact.
What to watch if you ask an AI to combine them
- The rent roll is read wrong. A unit dropped, a vacant unit read as occupied, a market rent from the wrong column. Check that the units add up to the totals the rent roll prints.
- The wrong rent roll for a month. Each month should use the rent roll dated in that month, or say it’s an estimate.
- Rent counted twice. The rent roll’s scheduled rent added to the bank’s rent, instead of reconciled to it. Collected rent should equal the bank’s figure, to the cent.
- Collection loss forced to zero. If scheduled rent and collected rent always match exactly, something was plugged.
Which do you need?
No rent roll: a cash-basis T-12 is the honest answer. With a rent roll, the split view tells you why the rent is what it is: how much is vacancy, how much is below-market leases, and how much is tenants not paying. That’s usually what a buyer or lender wants to know.