Economic rent refers to the payment to a factor of production or a resource above its opportunity cost. It usually applies to resources that are unique or inelastic in supply.
Effective Gross Income (EGI) represents the potential gross income generated from rental real estate, adjusted for a vacancy and collection allowance, plus any miscellaneous income.
An Equity Real Estate Investment Trust (REIT) that invests directly in properties and earns income from their ownership and operation.
Fair Market Rent (FMR) is the estimated amount of money a given property would likely command if it were available for lease in the current open market.
A real estate valuation metric calculated by dividing the sales price of a property by its gross rental income, typically used to estimate the value of income-producing properties.
Detailed overview of investment properties, including definitions, examples, FAQs, related terms, and resources for further study.
Potential Gross Income (PGI) represents the maximum rent a property could generate if it were fully leased at all times throughout the year, without any deductions for vacancies or uncollected rents.
A rent roll is an essential document for property management, providing comprehensive information about tenants, leased properties, rental amounts, and lease expiration dates.
The periodic charge per unit for the use of a property. The period may be a month, quarter, or year. The unit may be a dwelling unit, square foot, or other unit of measurement.
Residential rental property refers to rental units utilized for dwelling purposes, excluding transient lodging like hotels or motels. To qualify as residential for income tax purposes, at least 80% of a building’s income should come from dwelling units. This type of property is eligible for a 27½-year life for tax depreciation purposes, compared to a 39-year life for nonresidential property.
Unearned income refers to income that is not derived from active work, such as wages, salaries, or professional fees, but from investments, savings, or other passive sources like dividends, interest, and rental income.
