Effective Gross Income

Effective Gross Income (EGI) is the expected income from all operations after an allowance for vacancies and an allowance for collection losses is deducted from the Potential Gross Income.  Effective Gross Income includes items classified as Other Income (also called Miscellaneous Income).  Other income is income derived from sources other than rent.  Other income may include vending machine revenues, laundry revenues, etc.

 

The example below shows a typical statement of effective gross income as it would appear on a reconstructed cash flow statement.

 

Example:

 

Operating expenses are not considered when estimating the effective gross income.

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