The amount of income that could be produced by a real property assuming no vacancies or collection losses. Does not include miscellaneous income. Contrast with CASH FLOW, NET OPERATING INCOME .


Example: An office building has 10,000 square feet of rentable space and rents for an average of $12 per square foot.
Potential gross income for the building is $120,000 per year. Concessions on the ground floor that contribute $1,000 of annual revenue, and a 5% vacancy and collection allowance are not included in potential gross income.

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Dictionary of Real Estate Terms. Copyright © 2008 by Barron's Educational Series, Inc. All rights reserved.

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