Metrics

What Is Effective Gross Income (EGI)?

Effective gross income is the income a property actually collects: full-occupancy rent, less vacancy and credit loss, plus other income.

EGI = (Gross potential income − Vacancy) + Other income

Gross potential income assumes every unit rented at market for a full year. Subtract a realistic vacancy and credit-loss allowance, then add non-rent income like laundry, storage, and utility reimbursements, and you have EGI. Subtract operating expenses from EGI and you get NOI.

Work it through on the NOI calculator.

Related terms

• Net Operating Income (NOI)
• Economic Occupancy
• Operating Expense Ratio

Part of the RVP Underwriter glossary of income-property underwriting terms. Browse all definitions, or put them to work with the free calculators.