What type of income is added to the Effective Gross Income calculation?

Effective Gross Income (EGI) is an essential component in the financial analysis of real estate properties, particularly in the assessment and valuation process. EGI represents the total income generated from a property after accounting for vacancies and collection losses but before operating expenses are deducted.

Miscellaneous income plays a crucial role in the EGI calculation, as it encompasses any additional revenues generated by the property that are not categorized as standard rental income. This can include fees for parking, vending machines, laundry services, roof signage, and other similar sources of income that contribute to the overall profitability of the property. Adding miscellaneous income provides a more comprehensive view of the property’s financial performance.

Rental income is indeed a significant factor in EGI, but it is considered the primary source rather than an additional type of income; therefore, its role is more foundational than additive. Capital gains, which relate to the increase in value of the property itself over time, do not factor into EGI, as they pertain to the investment gain rather than the income generated by the property. Interest income, similarly, is not considered part of the operational income generated from a property and is typically related to separate financial transactions rather than directly to the real estate’s income-generating capacity.

Thus, the