Calculate effective gross income for a rental property. Deduct vacancy loss and credit loss from potential income and add other income sources.
Effective Gross Income (EGI) is the most realistic measure of a rental property's income. It starts with Potential Gross Income (the maximum rent if fully occupied), then subtracts vacancy loss and credit loss (unpaid rent), and adds non-rental income like laundry, parking, and storage fees.
EGI is a critical number in real estate investment analysis because it drives Net Operating Income (NOI), which determines property value, return metrics, and loan eligibility. Lenders, appraisers, and investors all use EGI as a foundation for financial modeling.
This calculator computes EGI by combining rental income, vacancy/credit deductions, and ancillary income sources. Use it to get an accurate picture of what your property actually earns.
Homebuyers, investors, and real-estate professionals all benefit from precise effective gross income (egi) figures when evaluating properties, negotiating deals, or planning long-term investment strategies. Save this calculator and revisit it whenever market conditions or your financial situation changes.
From first-time buyers to seasoned portfolio managers, access to precise effective gross income (egi) data empowers smarter negotiations, sharper investment analysis, and stronger financial planning. Adjust the inputs above to reflect your specific deal terms and explore how different variables shift the bottom line.
From first-time buyers to seasoned portfolio managers, access to precise effective gross income (egi) data empowers smarter negotiations, sharper investment analysis, and stronger financial planning. Adjust the inputs above to reflect your specific deal terms and explore how different variables shift the bottom line.
PGI is theoretical; EGI is reality. This calculator bridges the gap by accounting for vacancy, credit loss, and ancillary income, giving you the number that actually reaches your bank account. Instant recalculation lets you compare scenarios side by side, so every buying, selling, or investment decision is grounded in solid financial analysis.
Vacancy Loss = PGI × Vacancy Rate Credit Loss = PGI × Credit Loss Rate EGI = PGI − Vacancy Loss − Credit Loss + Other Income
Result: $119,200 EGI
PGI: $120,000. Vacancy loss: $8,400 (7%). Credit loss: $2,400 (2%). Other income: $8,000 (parking, laundry). EGI: $120,000 − $8,400 − $2,400 + $8,000 = $117,200. The non-rental income partially offsets vacancy and credit losses.
When evaluating a purchase, sellers often present proforma EGI with aggressive assumptions (3% vacancy, 0% credit loss). Buyers should recalculate EGI with market-realistic assumptions (6–8% vacancy, 1–2% credit loss) to avoid overpaying. A 5% swing in EGI changes the property's value and return metrics dramatically.
The three levers: 1) Increase PGI (raise rents, reduce loss-to-lease), 2) Reduce vacancy and credit loss (better screening, retention, marketing), and 3) Add other income (parking, storage, laundry, pet fees). The best operators pull all three levers simultaneously.
Plot monthly and annual EGI trends. Rising EGI means your property is performing well. Declining EGI signals problems: increasing vacancy, rising delinquency, or stagnant rents. Compare your EGI growth to market rent growth to ensure you're keeping pace.
PGI (Potential Gross Income) is the total rent if every unit is occupied and every tenant pays. EGI (Effective Gross Income) is PGI minus vacancy and credit losses, plus other income. EGI is always lower than PGI (except in the rare case of zero vacancy, zero loss, and significant other income).
Credit loss is rent that is owed but never collected: delinquent tenants, write-offs, legal collection failures, and bad debt. Even good properties experience 1–2% credit loss. Properties with lower-income tenants or weak screening may see 3–5%.
Common other income sources: coin laundry, parking fees, storage units, pet fees/rent, late fees, application fees, vending machines, signage revenue, antenna/cell tower leases, and move-in/move-out fees. Ancillary income can add 3–8% to PGI.
Property value = NOI / Cap Rate, and NOI = EGI − Expenses. So EGI directly drives property value. A $5,000 increase in EGI at a 6% cap rate adds $83,333 to property value. Maximizing EGI is the most direct path to building equity.
Rigorous tenant screening (income verification, credit check, landlord references), early follow-up on late payments, clear lease terms, and cash-for-keys when necessary. Professional property managers tend to have lower credit loss rates due to systematic screening.
Annual EGI is standard for investment analysis, property valuation, and lender presentations. Monthly EGI is useful for cash flow management and budgeting. This calculator can show both. Always clarify the period when discussing EGI.