What is Scheduled Gross Income in Real Estate?

Scheduled Gross Income (SGI) in real estate refers to the total potential income a property can generate if all units are rented at market rates and no vacancies or collection losses occur. It is a theoretical maximum revenue calculation before accounting for factors like vacancy, bad debt, or concessions.

Formula for SGI:

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SGI = Total Rentable Units x Market Rent per Unit

or for mixed-use properties:

SGI = Sum of Potential Income + Other Income Sources

Key Components of SGI:

Potential Rental Income (PRI): The total income if all units were occupied and paying market rent.
Other Income: Additional revenue sources like parking fees, laundry facilities, pet fees, storage units, or amenities.

Why SGI Matters:

It serves as a baseline for financial analysis.
Investors and lenders use it to assess income potential before factoring in losses.
It helps in comparing properties on a consistent basis.

Limitations:

SGI does not reflect the actual revenue received because it does not deduct vacancy losses, bad debt, or rent concessions, which are crucial for a realistic income projection.

What is Scheduled Gross Income in Real Estate?