Real Estate Definitions / Potential Rental Income
What is Potential Rental Income?
Potential rental income is the total amount of rent a single family or multi-family property could generate if it was 100% leased at competitive rates.
Potential Rental Income is the gross rental income that the property could generate before reductions for Vacancy Loss.
Potential Rental Income is the gross rental income that the property could generate before reductions for Vacancy Loss.
How to Forecast & Calculate Potential Rental Income
As an example calculation, lets examine a quad-plex that has competitive market rental rates of $1,250/mo for each unit. If the property were to be 100% leased, the Gross Potential Rental Income would be calculated as follows:
4 Units x $1250 per month = $5,000 in Monthly Potential Rental Income
$5,000 per month x 12 months per year = $60,000 in Annual Potential Rental Income
Download our Free Rental Property Spreadsheet to Calculate the Potential Rental Income & Analyze the Rental Cash Flow for your Rental Properties.