How it works
How this tool works.
The most common mistake in a first rental analysis is building everything on gross potential rent — the number the property would produce if it were full every day and every tenant paid every dollar. Real buildings have gaps: a few weeks empty between tenants, an occasional payment that never arrives. Effective gross income is the standard correction. It starts from potential rent, adds other income like parking or laundry, and subtracts an allowance for vacancy and credit loss.
The allowance is the honest part — and it’s yours to choose. This calculator doesn’t suggest a percentage, because the right one depends on your market, your unit, and your own history; a long-tenured single-family rental and a high-turnover studio deserve different assumptions. Enter your potential rent, other income, and the allowance you believe, and the tool shows the resulting EGI and the dollars the allowance represents. Subtract operating expenses from EGI and you have net operating income, the base of most other return math.
Enter annual gross potential rent — what the property would collect at full occupancy all year (monthly rent × 12, times units).
Add annual other income: parking, laundry, storage, pet rent, fees. Enter 0 if rent is the only income.
Set your own vacancy and credit-loss allowance as a percentage of gross potential rent — your assumption about empty time and uncollected rent.
The tool computes EGI = potential rent + other income − allowance, and shows the allowance in dollars so you can sanity-check what you’re assuming away.