In October 2026, appraiser Caleb Moore is reviewing an income statement for Oak Place. The property's NOI is $67,500, the expense ratio is 25%, and vacancy and collection loss is 10% of potential gross income. Assuming there is no other income, what is the property's potential gross income?
Correct Answer
C) $100,000
Step 1: If the expense ratio is 25%, NOI equals 75% of effective gross income. So EGI = $67,500 ÷ 0.75 = $90,000. Step 2: If vacancy is 10% of PGI, EGI equals 90% of PGI. Step 3: PGI = $90,000 ÷ 0.90 = $100,000.
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