How To Calculate Gross Potential (GPI) Real Estate Income
This one is relatively simple. We want to know what income will be realized if a property is fully occupied and all rents are collected. We take number of units times annual rent for a total.
Example: An apartment complex with six units. Three rent for $700 per month and the other three rent for $800 per month.
Difficulty: Easy
Time Required: 5 minutes
Here's How:
3 units * $700/month = $2100
$2100 * 12 = $25,200
3 units * $800/month = $2400
$2400 * 12 = $28,800
$25,200 + $28,800 = $54,000 Annual income.
Definition:
In real estate investing, analyzing the income performance of a property begins with knowing the gross income estimated without regard to losses for non-payment or vacancy. The Gross Potential Income is that number.
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