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.

See it on a real deal

RVP Underwriter computes this from your documents automatically, with every figure shown and sourced. Underwrite a deal free.

Related terms

Underwriting a specific property?

Step by step, line by line: how to underwrite an RV park or campground, a mobile home park, or a self storage facility. Every one starts the same way: rebuild the seller's NOI.

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