Effective Gross Income Calculator
Turn gross potential rent into effective gross income by subtracting vacancy and credit loss and adding other income — the real top line of a property.
How it works
EGI = gross potential rent − (GPR × vacancy%) + other income
Effective gross income is the income a property actually realizes: gross potential rent reduced by vacancy and uncollected rent, then increased by ancillary income. It sits between the optimistic rent roll and net operating income, and it is the revenue line every operating statement should be judged against. Because a single vacancy point can move EGI by thousands, the vacancy assumption deserves as much scrutiny as the rents themselves.
Worked example
On $180,000 of gross potential rent with a 5% vacancy and credit loss ($9,000) and $6,000 of other income, EGI is 180,000 − 9,000 + 6,000 = $177,000 — about 98.3% of gross potential.
Frequently asked questions
What counts as credit loss?
Credit loss is rent billed but never collected — from evictions, skips or bad debt — as opposed to vacancy, which is rent never billed because a unit sat empty. They are often combined into one vacancy-and-credit-loss allowance because both reduce collected rent.
What vacancy rate should I use?
Use your market’s actual figure; stabilized properties often model 5–8%, but submarkets vary widely. Underwriting with a rate below local reality is a classic way to overstate value.
Is EGI the same as net operating income?
No. EGI is the revenue line; net operating income subtracts operating expenses from EGI. NOI, not EGI, is what the cap rate is applied to when valuing the property.
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Educational estimate, not financial or investment advice.