Effective Gross Income (EGI)

Effective gross income is the total rental income actually collected after accounting for vacancy and credit losses, representing realistic revenue for property analysis.

CalculationFormula
Potential gross incomeAnnual rent if 100% occupied year-round
Minus: Vacancy lossExpected vacant periods
Minus: Credit lossTenant defaults and non-payment
Plus: Other incomeParking, laundry, storage fees
Equals: Effective gross incomeActual collectible revenue
Example CalculationAmount
Annual rent (100% occupied)AED 90,000
Vacancy allowance at 5%Minus AED 4,500
Credit loss at 1%Minus AED 900
Parking incomePlus AED 3,600
Effective gross incomeAED 88,200

Related Terms

Net Operating Income (NOI)Occupancy RateGross Operating Income (GOI)Vacancy RateRental Income

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