Property ValuationIntermediateDelaware Exam
What is 'effective gross income' in property valuation?
APGI minus vacancy and credit loss allowance, plus other incomeCorrect
BPGI plus all operating expenses
CNet operating income before debt service
DPGI as reported on the property's rent roll
Why PGI minus vacancy and credit loss allowance, plus other income Is Correct
Answer A: PGI minus vacancy and credit loss allowance, plus other income
Effective gross income (EGI) = Potential Gross Income (PGI) − Vacancy and Credit Loss + Other Income (parking, laundry, etc.).
Exam Tip: Property Valuation
Valuation questions focus on the three approaches to value: sales comparison, cost, and income. Know which approach is best for which property type. The income approach uses cap rate and NOI — memorize these formulas.
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