Deal Metrics

What is effective gross income?

Effective gross income is the income left after vacancy is removed from total rent and other income.

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Answer

Effective gross income is the income left after vacancy is removed from total rent and other income.

Formula: Effective Gross Income = Gross Income − Vacancy Loss

Example: Gross income = $2,100/month Vacancy loss = $105/month Effective gross income = $1,995/month

Why this matters: DealPrism uses effective gross income as the base for several operating expense calculations.

Related questions

What is DSCR (Debt Service Coverage Ratio)?What is NOI (Net Operating Income)?What is cap rate?What is cash-on-cash return?

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DealPrism provides educational analysis based on available data and user assumptions. Results are estimates and may change if rent, taxes, insurance, financing, or other inputs are updated. This content is not financial, legal, tax, or investment advice.