EGR
Frequently Asked Questions about Effective Gross Revenue (EGR)
What does EGR stand for in real estate?
EGR stands for Effective Gross Revenue, also known as Effective Gross Income. It reflects the total income a property generates after adjusting for vacancy and credit loss.
What is included in Effective Gross Revenue?
Effective Gross Revenue includes total rental revenue plus all other income sources, such as parking or laundry fees, minus general vacancy and credit loss.
How do you calculate EGR?
EGR = Total Rental Revenue + Total Other Income – General Vacancy & Credit Loss.
Why is EGR important in property analysis?
EGR provides a more accurate picture of a property’s expected income than gross rent alone. It’s essential for evaluating net operating income (NOI) and investment performance.
How does vacancy affect EGR?
Vacancy reduces EGR because it reflects income not collected due to unleased units or uncollected rent. It is typically expressed as a percentage deduction.
Is EGR the same as gross potential rent?
No. Gross potential rent assumes 100% occupancy and no credit loss, while EGR reflects actual expected income after adjusting for realistic vacancy and collection issues.
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