The Expense Ratio is a financial metric used to compare the operating expenses of a property to its potential gross income, allowing investors and property managers to analyze the relative operating efficiency.
Gross Possible Rent (GPR), also known as Potential Gross Income (PGI), represents the maximum rental income a property could generate if it were entirely occupied year-round with zero vacancies.
Potential Gross Income (PGI) represents the total rental income a property could generate if it were fully occupied at market rental rates and without any deduction for vacancies, rental concessions, or collection losses.
Vacancy and Collection Allowance is an estimated deduction from Potential Gross Income (PGI) when preparing a real estate budget. This deduction accounts for the loss of income from unrented units and uncollected rent.
