What does Potential Gross Income refer to?

Potential Gross Income (PGI) represents the total income a property could generate when fully occupied, without accounting for any vacancies or collection losses. This measure assumes that all rental units are leased at their current or market rental rates. By evaluating PGI, property managers and real estate investors can assess the maximum revenue a property can yield under ideal conditions, which is crucial for financial projections and investment planning.

Understanding PGI helps in budgeting and financial analysis, providing a benchmark for what income should be generated if the property were performing optimally. It's important for stakeholders to consider PGI, as it can inform decisions on pricing, marketing strategies, and potential improvements to increase occupancy rates.