Effective Gross Income (EGI)

Gross rent minus vacancy — the realistic income baseline.

Definition

EGI is what you actually expect to collect over time. It is the foundation for all operating expense calculations. Kaison applies management, maintenance, and capex reserves as percentages of EGI (not gross rent), which is the correct accounting treatment.

Formula

EGI = Gross Rent − Vacancy Loss

How Kaison Uses This

All operating expense percentages are applied to EGI, not gross rent.

Example

$1,650 − $132 = $1,518 EGI

Pro Tip

If someone quotes you opex as a percentage of gross rent, their numbers will be slightly higher than Kaison's.

Related Terms

Gross Monthly Rent

Total rent collected before any deductions or reserves.

Vacancy Reserve

Reserve for months the unit sits empty — default 8% of gross rent.

Property Management

Fee for a manager to handle tenants, repairs, and rent collection — default 10% of EGI.

Educational content only. Consult a CPA or attorney for advice specific to your situation.