Property Management

In Hawaii, what is the 'effective gross income' of a rental property?

AA. The total rent that would be collected if all units were always occupied and all tenants paid on time
BB. The potential gross income minus vacancy and collection losses✓ Correct
CC. The net income after subtracting all expenses including mortgage
DD. The income from rent plus income from other sources like parking

Explanation

Effective Gross Income = Potential Gross Income - Vacancy and Collection Loss. It represents the realistic income the property will generate after accounting for vacancies and non-payment.

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