Effective gross income is gross scheduled rent minus vacancy and collection loss, plus other income. It is what the property actually collects on a realistic basis.
EGI = GSR − (vacancy × GSR) − collection loss + other income (laundry, parking, storage, late fees). Vacancy typically runs 5–7% on stabilized LA multifamily; collection loss 1–2%. Other income adds 2–5% of GSR depending on property type and amenities.
EGI is what buyers actually underwrite to — not GSR. The gap between GSR and EGI is often the seller's blind spot. Sellers who list on GSR-based pricing get discounted back to EGI-based pricing in escrow.
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