Gross Potential Income

Gross Potential Income (GPI), sometimes called Gross Potential Rent (GPR), refers to the maximum amount of revenue a rental property can generate in a year. GPI assumes that all units are rented out and all rents are collected.

In a perfect scenario where every unit in a property is occupied and each tenant pays their full rent on time, the property owner would receive the GPI. However, this is rarely the case in real estate due to various factors such as vacancy and credit loss, leading to a more realistic measure called Effective Gross Income (EGI).

To calculate GPI, you would multiply the total number of units by the rent for each unit, and then multiply that by 12 (for 12 months in a year).

For example, if a rental property has 10 units, and each unit can be rented for $1,000 per month, then the GPI would be 10 units * $1,000/month * 12 months = $120,000 per year.

Remember that GPI doesn't take into account any costs such as maintenance, management fees, vacancies, or other expenses. It is simply a maximum potential income estimation.