Property Effective Gross Income Calculator
Effective gross income (EGI) is the realistic revenue a rental property collects once vacancy and credit losses are taken out and other income is added back. It is the foundation of every income-property valuation and the revenue line in the net operating income calculation. Enter potential gross income (rent at full occupancy), the vacancy and credit loss percentage, and any other income such as parking or laundry. The calculator returns your vacancy loss in dollars and the resulting effective gross income.
Effective gross income formula
Vacancy loss = potential gross income * (vacancy % / 100)
Collected rent = potential gross income - vacancy loss
EGI = collected rent + other income
Potential gross income is rent at full occupancy. Vacancy percentage is your market-based estimate of empty units and unpaid rent. Other income covers ancillary revenue. All dollar figures must be zero or positive.
Rental income context
- EGI is the revenue line that feeds net operating income (NOI = EGI minus operating expenses).
- Lenders and appraisers rely on EGI, not gross scheduled rent, when underwriting income property.
- Other income (parking, laundry, storage, fees) can meaningfully raise EGI in multifamily assets.
- Vacancy assumptions should reflect local market data; this calculator uses your editable percentage.
- EGI divided by NOI and then by value links income to cap rate, the core valuation ratio.
Effective gross income: frequently asked questions
What is effective gross income?
Effective gross income (EGI) is the income a rental property actually collects after subtracting vacancy and credit losses from potential gross income and adding any other income. It is the realistic top-line revenue figure used to derive net operating income.
What is the EGI formula?
EGI = potential gross income minus vacancy and credit loss plus other income. Potential gross income is the rent collectible at full occupancy; vacancy and credit loss is the expected shortfall; other income covers parking, laundry, fees, and similar revenue.
What is potential gross income?
Potential gross income (PGI) is the total rental income a property would generate if every unit were occupied at market rent for the entire period, with no vacancies or uncollected rent. It is the starting point before adjusting for real-world losses.
How is vacancy and credit loss estimated?
Vacancy and credit loss is usually expressed as a percentage of potential gross income, reflecting expected empty units and unpaid rent. Enter your own market-based percentage; this calculator multiplies it by potential gross income to get the dollar loss.
How does EGI relate to net operating income?
Net operating income (NOI) equals effective gross income minus operating expenses. EGI is therefore the revenue side of the NOI calculation. Accurate EGI is essential for valuation, cap rate analysis, and lender underwriting.
Official sources
- U.S. Internal Revenue Service: Publication 527, Residential Rental Property.
- U.S. Department of Housing and Urban Development: Multifamily Housing.
Reviewed by the CalculatorHub team, edited by James Graham, 16 June 2026. See our methodology.