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What Every Real Estate Investor Needs to Know About Cash Flow... And 36 Other Key Financial Measures, Updated Edition, 2nd Edition by Frank Gallinelli

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CHAPTER 12Calculation 6: Gross Scheduled Income (Potential Gross Income)

What It Means

The gross scheduled income (sometimes called potential gross income) is the annual income of a property if all rentable space were, in fact, rented and all rent collected. In short, it is the maximum potential income without regard to any possible vacancy or credit losses.

How to Calculate

What, on the surface, should be an unremarkable calculation, does provoke some debate among appraisers and analysts. Do you count occupied units at their actual rents or at their potential rents (which could be higher or even lower than actual if the market has changed)? Do you figure the value of vacant units at market rent, at a rental rate comparable to your own rented ...

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