What Is A Rent Schedule Module
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In this Watch Me Build video I show you how to build a custom-made lease schedule module for long-lasting leases. The structure of the module is a basic INDEX/MATCH mix that takes a lease schedule and designs the rent money flows across the entire hold duration.
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I also consist of an optional file that you can download and utilize to follow along with the video. That file includes both a 'Template' and 'Completed' tab. You're also welcome to take the finished variation, and integrate it straight into your own model.
Are you an Accelerator member? See the 'Modeling Short-Term and Leases course in the core curriculum. Additionally, if you're an Accelerator Advanced Member have a look at course 4, lesson 7 of the 'Advanced Modeling - Residential Or Commercial Property and Portfolio' endorsement for extra methods for modeling leases. Not yet an Accelerator member? Consider joining the realty financial modeling training program utilized by leading genuine estate companies and elite universities to train the next generation of CRE specialists.
A rent schedule is a table that lists out the base rent by date. So for circumstances, the rent schedule for a 75,000 SF spaced leased to an industrial on a 7-yr lease with 0.15/ SF bumps every year.
Rent/Yr
- Jan 1, 2018 - $337,500.
Jan 1, 2019 - $348,750.
Jan 1, 2020 - $360,000.
Jan 1, 2021 - $371,250.
Jan 1, 2022 - $382,500.
Jan 1, 2023 - $393,750
The lease schedule is included in the lease to outline the base lease paid by the occupant. So utilizing the lease schedule above, we understand that the tenant pays $382,500 lease in 2022 ($ 31,875/ month). The lease schedule thus becomes a crucial input for modeling the possible lease of a residential or commercial property.
A rent schedule module belongs of a real estate design that anticipates the prospective rental income over the hold period. So utilizing the example above, the rent schedule module would take the rent schedule and compute precisely the lease for every period. And preferably the module would do this in a vibrant method.
The module will consist of a rent roll listing the prominent inputs for each occupant. So for example, the lease roll would consist of tenant name, suite, leased location, lease start date, lease end date, present lease, etc. Each renter would then have a lease schedule that lays out how the base rent changes in time.
The module then takes the lease roll, the lease schedule, and designs the actual capital for each period.
Quick Note: Not interested in DIY analysis? Consider working with A.CRE Consulting to manage your bespoke modeling job.
Watch Me Build Video - Partitioning the IRR in Real Estate
So in this Watch Me Build video, I reveal you how to build a lease schedule module for a long-term lease. I first drop in an export of a rent roll. From there, I include a lease roll for a single renter (National Insulation, Inc.) and link the relative info from the rent schedule to the rent roll.
Next, I model out the rent by month over a 132 month analysis duration. I utilize boolean reasoning to only model rent in periods where the lease is in force. And I utilize an INDEX/MATCH mix to pull in the rent from the lease schedule based upon the duration.
The outcome is a fast and basic way to dynamically design a lease schedule.
Download the Rent Schedule Module Exercise File and Module
To make this tool available to everybody, it is used on a "Pay What You're Able" basis without any minimum (enter $0 if you 'd like) or maximum (your support helps keep the content coming - typical realty Excel modules sell for $100+ per license). Just go into a cost together with an e-mail address to send the download link to, and then click 'Continue'. If you have any concerns about our "Pay What You're Able" program or why we provide our models on this basis, please reach out to either Mike or Spencer.
We frequently upgrade the model (see variation notes). Paid contributors to the model get a brand-new download link through e-mail each time the design is updated.
Bonus: Watch Me Model Rent Schedule Cash Flows Using AI
In this fast bonus video, I utilize ChatGPT to model the regular monthly capital for this same lease.
Frequently Asked Questions about Modeling a Lease Schedule in Excel and with AI
What is a rent schedule?
A lease schedule is a table that lists the base lease by date across the lease term. For example, it may reveal yearly rent boosts for a tenant on a long-lasting lease, such as $337,500 in 2018, $348,750 in 2019, and so on. It becomes an essential input for modeling rental income.
What is a lease schedule module?
A lease schedule module is an element of a property design that forecasts rental income over the hold period. It utilizes occupant lease information from the rent roll and a lease schedule to design lease money flows dynamically for each analysis duration.
How is lease designed throughout time in this module?
Rent is modeled using a 132-month analysis duration. Boolean reasoning makes sure lease is just shown when the lease is active. An INDEX/MATCH formula is then used to pull the correct lease from the lease schedule based upon the duration.
What Excel techniques are used in the rent schedule module?
The design mainly utilizes the INDEX/MATCH combination to pull lease worths and boolean reasoning to restrict lease streams to the lease duration. These solutions guarantee the module stays vibrant and scalable for longer leases or multiple occupants.
What tenant is used in the example design?
The example design uses a tenant named National Insulation, Inc. The rent schedule and lease information for this single occupant are utilized to demonstrate how to structure and compute rent money flows.
Is a downloadable file offered with the tutorial?
Yes. A downloadable file is included with both a 'Template' and 'Completed' variation of the model. It is offered on a "Pay What You're Able" basis. Contributors get update emails when new variations are released.
How is AI used in modeling lease capital?
A perk video demonstrates how ChatGPT is utilized to design the exact same lease money circulation as performed in Excel. This showcases how AI can help in building customized modeling reasoning using natural language triggers.
Where can I discover more about lease modeling in-depth?
Accelerator members can explore in-depth lease modeling in the 'Modeling Short-Term and Long-Term Leases' course. Advanced members can dive deeper by means of Course 4, Lesson 7 of the 'Advanced Modeling - Residential Or Commercial Property and Portfolio' recommendation.
Version Notes
v1.01
- Misc. repairs and updates to Versions tab
v1.0
- Initial release
About the Author: Spencer Burton is Co-Founder and CEO of CRE Agents, an AI-powered platform training digital coworkers for commercial genuine estate. He has 20+ years of CRE experience and has actually financed over $30 billion in realty throughout top institutional firms.