What is Effective Gross Income?
Effective gross income is a measure of the total income that is generated by a property, after deducting vacancy and credit loss. Effective gross income is often used in real estate investment analysis, and it is a key factor in determining the financial performance of a rental property. Effective gross income is calculated by adding the gross rental income of a property, minus any vacancy and credit loss, and it may be used to compare the income potential of different properties or to assess the feasibility of a proposed investment.