Annual gross potential rental income from a property minus expenses (vacancy and collection losses, operating expenses, replacement reserves, property taxes, and property and liability insurance) equals Effective gross income . This is further explained below.
Generally, Effective gross incomeis simply defined as the total effective gross revenue equals potential gross income less vacancy and collection losses + other income.
In conclusion, Potential gross revenue minus vacancy and collection losses, plus other income, is equivalent to effective gross income.
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