Property Valuation
In the income approach to appraisal, which term describes potential gross income minus vacancy and collection losses?
ANet operating income
BEffective gross income✓ Correct
CCash flow before tax
DGross rent multiplier
Explanation
Effective Gross Income (EGI) = Potential Gross Income (PGI) minus vacancy and collection losses, plus any other income. It represents the realistic income a property is expected to generate.
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