In this Watch Me Build video I reveal you how to develop a custom rent schedule module for long-term leases. The foundation of the module is a basic INDEX/MATCH combination that takes a lease schedule and models the rent cash streams throughout the entire hold duration.

I also consist of an optional file that you can download and utilize to follow in addition to the video. That file consists of both a 'Template' and 'Completed' tab. You're also welcome to take the completed variation, and include it straight into your own design.

Are you an Accelerator member? See the 'Modeling Short-Term and Long-Term Leases course in the 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 strategies for modeling leases. Not yet an Accelerator member? Consider signing up with the genuine estate financial modeling training program used by top property companies and elite universities to train the next generation of CRE experts.

A rent schedule is a table that notes out the base rent by date. So for instance, the rent schedule for a 75,000 SF spaced rented to a commercial 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 consisted of in the lease to lay out the base rent paid by the tenant. So utilizing the rent schedule above, we know that the occupant pays $382,500 rent in 2022 ($ 31,875/ month). The lease schedule therefore becomes an important input for modeling the possible rent of a residential or commercial property.

A lease schedule module is a part of a property model that anticipates the potential rental earnings over the hold duration. So utilizing the example above, the rent schedule module would take the rent schedule and compute precisely the rent for every single duration. And preferably the module would do this in a dynamic method.

The module will include a rent roll noting the salient inputs for each tenant. So for example, the rent roll would include renter name, suite, leased area, lease start date, lease end date, existing rent, etc. Each occupant would then have a lease schedule that outlines how the base lease changes in time.

The module then takes the lease roll, the lease schedule, and models the real money circulation for each duration.

Quick Note: Not interested in DIY analysis? Consider working with A.CRE Consulting to manage your bespoke modeling task.

Watch Me Build Video - Partitioning the IRR in Real Estate

So in this Watch Me Build video, I show you how to construct a rent schedule module for a long-term lease. I initially drop in an export of a rent roll. From there, I add a lease roll for a single tenant (National Insulation, Inc.) and connect the relative info from the rent schedule to the lease roll.

Next, I model out the lease by month over a 132 month analysis period. I utilize boolean logic to just model lease in periods where the lease is in force. And I utilize an INDEX/MATCH mix to draw in the rent from the lease schedule based upon the period.

The outcome is a fast and easy method to dynamically design a rent schedule.

Download the Rent Schedule Module Exercise File and Module

To make this tool accessible to everyone, it is offered on a "Pay What You're Able" basis with no minimum (go into $0 if you 'd like) or maximum (your assistance helps keep the material coming - common genuine estate Excel modules cost $100+ per license). Just get in a price together with an email address to send out 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 connect to either Mike or Spencer.

We regularly upgrade the model (see version notes). Paid factors to the design get a brand-new download link by means of email each time the design is upgraded.

Bonus: Watch Me Model Rent Schedule Cash Flows Using AI

In this quick reward video, I utilize ChatGPT to design the month-to-month capital for this very same lease.

Frequently Asked Questions about Modeling a Rent Schedule in Excel and with AI

What is a lease schedule?

A lease schedule is a table that lists the base rent by date throughout the lease term. For example, it may reveal annual lease boosts for a renter on a long-term lease, such as $337,500 in 2018, $348,750 in 2019, etc. It becomes a crucial input for modeling rental income.

What is a lease schedule module?

A lease schedule module is an element of a property model that anticipates rental income over the hold period. It uses tenant lease data from the rent roll and a lease schedule to model rent money streams dynamically for each analysis period.

How is lease designed throughout time in this module?

Rent is designed utilizing a 132-month analysis duration. Boolean reasoning makes sure lease is just shown when the lease is active. An INDEX/MATCH formula is then utilized to pull the appropriate rent from the lease schedule based on the period.

What Excel techniques are used in the rent schedule module?

The model mostly uses the INDEX/MATCH combination to pull lease values and boolean reasoning to limit rent streams to the lease duration. These solutions make sure the module stays dynamic and scalable for longer leases or several renters.

What renter is utilized in the example model?

The example model uses an occupant called National Insulation, Inc. The rent schedule and lease details for this single renter are used to demonstrate how to structure and determine rent cash flows.

Is a downloadable file supplied with the tutorial?

Yes. A downloadable file is included with both a 'Template' and 'Completed' variation of the model. It is provided on a "Pay What You're Able" basis. Contributors receive upgrade emails when brand-new versions are launched.

How is AI utilized in modeling rent cash flows?

A bonus offer video demonstrates how ChatGPT is utilized to design the same rent capital as carried out in Excel. This showcases how AI can assist in building customized modeling logic utilizing natural language triggers.

Where can I discover more about lease modeling extensive?

Accelerator members can explore detailed lease modeling in the 'Modeling Short-Term and Long-Term Leases' course. Advanced members can dive much deeper via Course 4, Lesson 7 of the 'Advanced Modeling - Residential Or Commercial Property and Portfolio' recommendation.

Version Notes

v1.01

- Misc. fixes 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 real estate. He has 20+ years of CRE experience and has financed over $30 billion in property across leading institutional firms.