Property Valuation
In the income approach, 'potential gross income' (PGI) is the income a property would generate if it were:
AOperating at 90% occupancy
B100% occupied for the entire year at market rents✓ Correct
CGenerating the maximum possible rental income under any use
DOccupied only by long-term tenants
Explanation
Potential Gross Income (PGI) is the total rental income a property would generate if it were 100% occupied at current market rents for the full year. From PGI, vacancy and credit losses are subtracted to arrive at Effective Gross Income (EGI).
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