Effective Gross Income (EGI) is income generated by a property including base rent and miscellaneous income, less vacancy and collection losses.
For example, if a retail property has 10 units which could each generate $10,000 per year in base rent, plus signage income of $20,000 per year and a market vacancy rate of 10%, then an investor may determine the property’s EGI to be $110,000 (10 units times $10,000 each equals $100,000, less 10% vacancy equals $90,000, plus $20,000 in miscellaneous income).
