Effective Gross Income (EGI) for income-producing property is the potential gross income minus a vacancy and collection allowance, plus miscellaneous income.
Gross income represents the total income generated from property or other sources before any expenses or deductions are applied. It includes rental income, alimony, retirement benefits, and various other income streams.
The Operating Expense Ratio (OER) is a key metric used in real estate to measure the efficiency of a property's management by comparing its operating expenses to its potential gross income. A lower OER indicates a more efficiently managed property.
Pretax income refers to the amount of income that a business or individual earns before any income taxes are deducted. This figure is crucial for determining the net profitability of operations and for financial analysis.
Residual value or income refers to the remaining value or income after necessary deductions to meet fixed obligations. This term is crucial in both real estate investments and appraisals.
Revenue refers to the total income generated from normal business operations and includes discounts and deductions for returned merchandise. It is a crucial metric indicating the financial performance of an organization.
Taxable income or loss is the amount of income or loss a taxpayer reports on their tax return from various sources, including rental real estate. It involves subtracting various allowable deductions from gross income to determine the net amount subject to taxation.
