Property Valuation
The term 'effective gross income' in a property appraisal means:
ATotal scheduled rents regardless of vacancies
BPotential gross income minus vacancy and collection losses✓ Correct
CNet operating income before depreciation
DGross income divided by the gross rent multiplier
Explanation
Effective Gross Income (EGI) = Potential Gross Income (PGI) – Vacancy and Collection Losses + Miscellaneous Income. It represents the realistic income the property is expected to generate, accounting for typical vacancy and non-payment.
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