Potential Gross Income (PGI)
The total income a property would generate at full occupancy and market rents, before any deduction for vacancy or collection loss. The top line of the income approach's operating statement.
Related Terms
Effective Gross Income (EGI)
EGIPotential gross income minus vacancy and collection losses, plus other income (laundry, parking, late fees).
Vacancy and Collection Loss
The deduction from potential gross income for expected unoccupied periods and uncollected rent, expressed as a percentage based on market evidence.
Market Rent
The rental income a property would most likely command on the open market, based on analysis of comparable rental properties in the area.
More in Income Approach
View allCapitalization Rate (Cap Rate)
Cap RateThe ratio of a property's net operating income to its market value or sale price, expressed as a percentage.
Gross Rent Multiplier (GRM)
GRMThe ratio of a property's sale price to its gross monthly (or annual) rental income.
Net Operating Income (NOI)
NOIThe annual income remaining after deducting all operating expenses from effective gross income, but before deducting debt service (mortgage payments) and income taxes.
Discounted Cash Flow Analysis (DCF)
DCFA yield capitalization technique that estimates property value by projecting future cash flows (income minus expenses) over a holding period and discounting them to present value using a market-derived discount rate..