Effective Gross Income

Actual expected income after vacancy and other income.

Example Result

Sample Data

$32,490

Based on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.

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Effective Gross Income Formula

Gross Potential Rent - Vacancy Loss + Other Income

Gross Potential Rent $34,200

- Vacancy Loss $1,710

+ Other Income $0

= Effective Gross Income $32,490

What This Means

A sample property priced at $385,000 with $2,850/month rent has a effective gross income of $32,490. EGI is the true top-line revenue number for your property. Using GPR alone overstates income because no property achieves 100% occupancy indefinitely. EGI gives you a realistic foundation for calculating NOI and cash flow.

Where This Value Comes From

Effective Gross Income is not entered directly — it is calculated from Gross Potential Rent, Vacancy Loss Annual, and Other Income. See the formula breakdown above and the detailed inputs below.

Calculated From

Effective Gross Income is calculated using these inputs:

Gross Potential Rent

Total annual rental income assuming full occupancy.

$34,200

Vacancy Loss Annual

Annual income lost to vacancy.

$1,710

Other Income

Monthly income from sources other than rent (parking, laundry, storage, etc.).

Found on your lease addendums

Used to Calculate

Effective Gross Income is used as an input for these calculations:

Income Per Square Foot

Income Metrics

$21.66

Operating Expense Ratio

Expense Metrics

37.38%

Depreciation as Percent of Income

Tax Benefits

34.47%

Platform Distribution

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Why It Matters

EGI is the true top-line revenue number for your property. Using GPR alone overstates income because no property achieves 100% occupancy indefinitely. EGI gives you a realistic foundation for calculating NOI and cash flow.

Detailed Explanation

Effective Gross Income (EGI) adjusts Gross Potential Rent by subtracting expected vacancy losses and adding other income sources like laundry, parking, or storage fees. It reflects the realistic income you can expect to collect.