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Rental Income Reasonableness CalculatorUnits, Rent and Vacancy

What do these figures come to once the work is shown?

Expected rental income from units, monthly rent, months and vacancy rate, with the difference to recorded income and an investigate flag.

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  • Nothing stored or sent
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Your figures
Example figuresIllustrative only. Type over them with your own.
Difference (recorded less expected)
$84,560
Recorded rental income less the expectation
Gross potential rent
$4,176,000
Expected rental income
$3,925,440
Drawn to one scale
Gross potential rent$4,176,000
Expected rental income$3,925,440
Recorded amount$4,010,000
Difference (recorded less expected)$84,560
All results
MeasureResult
Gross potential rent$4,176,000
Expected rental income$3,925,440
Recorded amount$4,010,000
Difference (recorded less expected)$84,560
Difference as % of expected2.15%
InvestigateYes: difference exceeds the threshold
How this was worked out
Work shownrecomputed as you type
Gross potential rent = units x monthly rent x months
Expected income = gross potential rent x (1 - vacancy rate)

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Gross potential rent = units x monthly rent x months
  • Expected income = gross potential rent x (1 - vacancy rate)

How it works

AU-C 520 paragraph .A13 uses this exact procedure as its example of an analytical procedure that provides persuasive evidence: predicting total rental income on an apartment building from rental rates, the number of apartments and vacancy rates. When the inputs are verified, it can remove the need for further tests of details.

Verify the rent roll, the unit count and the vacancy rate before relying on the result. Concessions, free rent periods and straight-line adjustments make recorded income differ from cash rent, so add them to the expectation when they are significant.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

Where does the vacancy rate come from?

From monthly rent rolls or occupancy reports. Average the monthly rates rather than using the year-end rate.

What about other income such as parking or fees?

Leave it out of recorded income here, or build a separate expectation for it.

Why is my difference large?

Common causes are mid-year rent increases, concessions, bad debt netted against revenue, and units taken offline for renovation.

Sources

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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