Definition
Net rental income accounts for realistic vacancy and gives a truer picture than gross income. It's the collectable rental income.
Not sure where this fits?
Answer a few questions and we’ll open the path that fits, at the right step.
Find my pathAbout this term
Net rental income accounts for realistic vacancy rates and gives a truer picture than gross income. Calculation: Gross Rental Income × (1 - Vacancy Rate) = Net Rental Income. This is still before operating expenses and debt service, making it useful for quick comparisons.
Pro Tip
Always calculate net rental income with realistic vacancy assumptions.
Example
A property with $72,000 gross rental income and 8% vacancy has $66,240 net rental income