How do you calculate EGI from rents?

The calculation of Effective Gross Income (EGI) involves adjusting the Potential Gross Income (PGI) by accounting for various factors such as vacancy losses and other fluctuations in income. EGI represents the actual income a property generates after these adjustments are made.

The correct option highlights the comprehensive approach needed to determine EGI. Specifically, it recognizes the importance of subtracting not only vacancy costs but also acknowledges miscellaneous income, which can positively impact a property's income stream. This aligns with standard real estate practices where both losses and additional income streams are considered to achieve a realistic view of a property's financial performance.

In this context, EGI is calculated as PGI less the effects of vacancies, along with any additional income from sources like parking fees or laundry services, which would enhance the total revenues of the property. This detailed assessment enables property managers and assessors to have a clearer picture of the property's actual earning potential, ensuring better financial planning and reporting.