Gross income refers to the total income generated by a property before deducting any expenses or allowances. For rental properties, the gross income includes rent payments and any additional revenue from sources like parking fees, laundry facilities, or storage rentals. Gross income is a crucial component in calculating the property’s value, return on investment, and potential profitability, especially when using the income capitalization approach or the gross income multiplier method.
Related real estate terminology:
Net operating income (NOI)
Gross income multiplier (GIM)
Operating expenses
Gross rent
Rental income
Income capitalization approach
Cash flow
Capitalization rate (cap rate)
Effective gross income (EGI)
Vacancy allowance
References:
Investopedia: Gross Income – Definition and Explanation in Real Estate
The Balance: Understanding Gross Income in Real Estate
National Association of Realtors: Key Financial Metrics in Real Estate Investment
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