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Effective Gross Income
Effective Gross Income is collectible property income after vacancy, concessions, and collection losses, plus other recurring revenue.
Definition
Effective Gross Income (EGI) is the income a multifamily property is expected to collect from rent and other recurring revenue after accounting for real-world revenue losses such as vacancy, concessions, and collection losses. It helps translate gross potential rent—the maximum income at full occupancy with no losses—into a more practical revenue figure. EGI is commonly used as the income base for operating measures such as net operating income (NOI).
Example
A 200-unit property has $3,000,000 in gross potential rent. After $180,000 in vacancy loss, $60,000 in concessions, $20,000 in collection losses, and $150,000 in other fee income, its EGI is $2,890,000.
Why it matters
EGI matters because it shows how much revenue the property is actually turning into operating income, not just what it could earn on paper. For operations leaders, it connects leasing, occupancy, concessions, fee income, and collections to budget performance and NOI.