Effective gross rental income: Allowing for Vacancy in Rental Income
Effective gross income starts with potential rent, subtracts vacancy loss and adds other property income. It bridges the gap between full occupancy and a more realistic operating scenario.
Use the Effective gross rental income Calculator to enter your own figures and compare the result with the worked example below.
Effective gross rental income formula
Effective gross income = Potential rent − Vacancy loss + Other property income
Worked example
| Item | Example value |
|---|---|
| Potential rent | 24000 USD |
| Vacancy loss | 2400 USD |
| Other property income | 1000 USD |
| Effective gross rental income | 22,600 USD |
These are illustrative inputs, not current prices, rates or recommended targets. Where a currency is shown, keep all comparable money amounts in the same currency; conversion examples identify the two sides separately.
How to interpret the result
Avoid subtracting vacancy twice when using rent already adjusted for empty periods. Other income should be supported by the property's actual arrangements.
Related calculations
Method and further reading
The example follows the FinMathly calculator method. For broader background, see CFPB: Building a budget. The background resource may use jurisdiction-specific terms; it does not replace the assumptions of this calculator.
Featured photograph: Pexels.