Property Management
What is the 'vacancy and credit loss' allowance in a Delaware income property analysis?
AThe cost to market vacant units
BAn estimate of income lost due to unoccupied units and tenants who do not pay rent✓ Correct
CThe credit given to tenants for early payment
DThe landlord's credit line for emergency repairs
Explanation
Vacancy and credit loss is the deduction from potential gross income (PGI) to account for units that are vacant during the year and for tenants who default on rent payments. It converts PGI to effective gross income (EGI).
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