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Updated almost 6 years ago on . Most recent reply

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60
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Vlad Denisov
  • Glendale, CA
12
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60
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Utility Income&Miscellaneous Income

Vlad Denisov
  • Glendale, CA
Posted

Let's say we have our Gross Potential Rent and we add to it Utilities and Misc. Then we have to exclude Physical Vacancy and Economic Vacancy to get to our Gross Operating Income, right? 

1. What info do you use for Utilities and Misc? It seems that it hard to predict it, especially if you are going through value add.

2. Why do we first add Utilities and Misc and then subtract Stabilized Vacancies out of this number? Why not in the other order?

Most Popular Reply

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16
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2
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TJ Park
  • Developer
  • San Francisco, CA
2
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16
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TJ Park
  • Developer
  • San Francisco, CA
Replied

Gross Potential Income

(-) Vacancy, Bad Debt, Concessions

(-) Non Revenue such as model or employee units

= Net Rental Revenue

(+) Other Income such as utility income

You need to net out vacancy before calculating what the utility income will be since it is tied to occupancy and usage.

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