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Investing metrics

Effective gross income (EGI)

Effective gross income is the property income expected after vacancy and collection loss, plus eligible other property income, before operating expenses.
Glossary
Investing metrics
Use this definition: NOI calculator
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Effective gross income (EGI)
How effective gross income (egi) works
Worked example
Common mistakes and review checks
3
Related terms
Gross potential rent (GPR)
Vacancy loss
Net operating income (NOI)
Loss to lease
Effective gross income (EGI)
Investing metrics
1
How effective gross income (egi) works
Start with gross potential rental income, subtract vacancy and credit loss, and add documented other property income. Then subtract normalized operating expenses to reach NOI. Keep debt service, depreciation, and income tax outside the property-operating calculation.
Worked example
A property with $240,000 potential rent, $18,000 vacancy and collection loss, and $12,000 other income has $234,000 EGI before operating expenses.
Common mistakes and review checks
Treat the result or document as one input to a decision. Verify the current source document, definitions, dates, and transaction facts before relying on it.
Investing metrics
Effective gross income (EGI)
Effective gross income is the property income expected after vacancy and collection loss, plus eligible other property income, before operating expenses.
Gross potential rent (GPR)
Vacancy loss
Net operating income (NOI)
Loss to lease
Effective gross income (EGI)
Category
Investing metrics
Related terms
5
Related tools & guides
1
Sources
1
Related tools & guides
NOI calculator
Sources
OCC Comptroller's Handbook: Commercial Real Estate Lending 2.0
Office of the Comptroller of the Currency

What is effective gross income?

Primary references on this page:
OCC Comptroller's Handbook: Commercial Real Estate Lending 2.0
EGI bridges scheduled rent and net operating income. The exact underwriting presentation can vary, so label the period, rent source, vacancy assumption, concessions, bad debt, reimbursements, parking, laundry, and other income rather than copying one unverified total.

How effective gross income (egi) works

Start with gross potential rental income, subtract vacancy and credit loss, and add documented other property income. Then subtract normalized operating expenses to reach NOI. Keep debt service, depreciation, and income tax outside the property-operating calculation.
Formula: EGI = gross potential income − vacancy and credit loss + other property income

Worked example

A property with $240,000 potential rent, $18,000 vacancy and collection loss, and $12,000 other income has $234,000 EGI before operating expenses.

Common mistakes and review checks

Treat the result or document as one input to a decision. Verify the current source document, definitions, dates, and transaction facts before relying on it.
Using scheduled rent as though every dollar were collected.
Adding one-time owner proceeds as recurring property income.
Mixing operating expenses into EGI instead of subtracting them to reach NOI.
In this article
01
How effective gross income (egi) works
02
Worked example
03
Common mistakes and review checks
Related tools & guides
NOI calculator
Editorial ownership
Written and maintained by the Aptoria editorial team
Content updated August 3, 2026. Editorial method reviewed July 28, 2026. Aptoria reviews scope, source fit, examples, limitations, links, and publication gates. This record does not claim attorney, CPA, lender, appraiser, or other independent professional sign-off.
How Aptoria researches and reviewsReport a correction
Primary and authoritative sources
OCC Comptroller's Handbook: Commercial Real Estate Lending 2.0 ↗
NOI, DSCR, debt yield, capitalization-rate analysis, and warnings about normalizing property income and expenses.
Office of the Comptroller of the Currency

Related terms

Investing metrics
Gross potential rent (GPR)
The maximum rental income a property could produce with every unit occupied at market rent for the full period.
Investing metrics
Vacancy loss
The rent a property fails to collect because units sit empty, expressed in dollars or as a percentage of gross potential rent.
Investing metrics
Net operating income (NOI)
Net operating income is effective property income minus normalized property operating expenses, before debt service and owner-level income taxes.
Investing metrics
Loss to lease
The difference between a unit’s stated market rent and the contract rent in place for the same period, under a defined reporting method.
Rent
Gross rent
A top-line rent amount before operating expenses, which must be labeled as potential, scheduled, billed, or collected to be meaningful.

From definition to done

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