What does EGI stand for in property management?

Effective Gross Income, abbreviated as EGI, refers to the income generated by a property after accounting for vacancies and credit losses but before deducting operating expenses. It provides a clearer understanding of a property's income-generating potential, as it reflects the actual income expected from rents and other sources while considering the likelihood of tenants paying their obligations.

Effective Gross Income is an essential metric in property management, as it helps property managers and investors assess the overall financial performance of real estate investments, enabling them to make informed decisions regarding property operations and improvements. This calculation serves as a foundational element in cash flow analysis, which is crucial for evaluating both current and future investment opportunities.

In contrast, the other options do not accurately define EGI within the context of property management. Exempt Grant Income, for example, suggests a specific type of income that is not commonly used as a financial metric in property management. Similarly, Estimated Gross Income and Executive Gross Income are not standard terms utilized to describe property income after accounting for risks such as vacancies or tenant turnover.