Metrics

What Is Gross Potential Income (GPI)?

Gross potential income is the most a property could collect: every unit or site leased at market rate for a full year, before any vacancy or loss.

GPI = Units × Market rent × 12 (for monthly rents)

GPI is the top line, the income ceiling. It assumes 100% occupancy at market rent, so it is a potential, not a reality. Subtract a vacancy and credit-loss allowance and add other income to reach effective gross income, then subtract operating expenses for NOI.

GPI is also the denominator of economic occupancy and break-even occupancy: what you actually collect, measured against what you could. A wide gap between GPI and collected income is exactly where value-add lives.

Related terms

• Effective Gross Income (EGI)
• Economic Occupancy
• Net Operating Income (NOI)

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