Sample Size Calculator for Real Estate

Sampling Considerations for Real Estate

Real estate audits combine property-level valuations (which may be tested individually for large portfolios or sampled for very large ones) with high-volume tenant transactions. Rental income, service charges, and lease incentive amortisation all require testing across a population of tenant leases that can number from dozens to thousands depending on portfolio size.

Sampling focus: Real Estate

Rental income sampling should trace from lease agreements through to cash receipts. MUS applied to the annual rental population by tenant naturally selects the largest tenants. For property valuations under IAS 40, where the portfolio is too large for 100% testing, sampling properties and testing the valuation inputs (yield, ERV, vacancy assumptions) is the standard approach.

Key sampling considerations

For investment property portfolios with fewer than 30–40 properties, consider testing all valuations individually rather than sampling — the population may be too concentrated for statistical sampling to be meaningful.

Rental income should be tested against signed lease agreements — sample tenancies to verify contracted rents, rent-free periods, stepped rents, and break clause provisions.

Service charge income and expenditure should be sampled separately — test that charges to tenants are supported by actual costs incurred and that reconciliations are performed.

Lease incentives (rent-free periods, tenant improvement contributions) must be amortised over the lease term — sample leases with incentives to verify the amortisation calculation.

For development properties held as inventory, sample cost accumulations to verify that only directly attributable costs and qualifying borrowing costs are capitalised.