Effective Gross Income (EGI)
A property's total income, including miscellaneous income, less a vacancy collection allowance.
Example: A property generates $50,000 in rental income, has a 5% vacancy loss, and collects $2,000 from Tenants via laundry machines it provides.
$50,000 + $2,000 – $2,500 (5% vacancy) = $49,500 effective gross income
A series of statements about a lease that a Tenant certifies to the current landlord or to a potential purchaser to be accurate and true. Once the certificate is signed, the Tenant is "estopped," or legally barred, from asserting a contrary claim.
Example: ABC Company signs an estoppel that reads, "The fixed monthly rent payable under the Lease is $1,000 and has been paid through 05/28/08." By signing the Estoppel Certificate, ABC Company is certifying its understanding of the monthly rent and the date of the latest rent payment.
A comparison of operating expenses to potential gross income.
Example: ABC Company's apartment complex generates potential gross income of $1 Million annually and incurs operating expenses of $500,000 annually. The expense ratio is 50%.