Gross Income

Gross income means everything a property or person takes in, counted before a single expense or deduction comes out. For a rental it starts as scheduled rent for the year, and after vacancy it becomes effective gross income. Every line of a cash on cash calculation is subtracted from this figure.

The default property rents for $5,200 a month, or $62,400 a year at full occupancy. A 5% vacancy allowance takes it to $59,280 of effective gross income. Each point of vacancy on this deal is $624 of cash flow and about 0.4 points of cash on cash return.

Other income belongs here too: laundry, parking, storage and pet fees. Small amounts matter because they flow almost entirely to the bottom line. An extra $100 a month adds up to $1,200 a year of cash flow, close to a point of return.

Further reading: Gross Income on Wikipedia.