v. Revenue, Expenses & Cash Flow

Revenue, expenses, and cash flow describe how real estate assets generate income, incur costs, and produce operating results. These fundamentals form the economic foundation for valuation, financing, and investment decision-making across the real estate lifecycle.

Additional Income

Revenue generated from non-rent sources such as parking, storage, amenities, or service fees.

Cash Flow

The net amount of money generated by a property after all operating expenses and debt service are paid.

Effective Gross Income (EGI)

Gross potential income adjusted for vacancy, credit loss, and concessions.

Expense Ratio

The proportion of operating expenses relative to gross income, used to assess cost efficiency.

Fixed Expenses

Costs that do not fluctuate significantly with occupancy, such as property taxes and insurance.

Gross Operating Income

Total income generated by a property before operating expenses are deducted.

Gross Potential Income (GPI)

The maximum possible income a property could generate if fully leased at market rates.

Net Operating Income (NOI)

Income remaining after operating expenses are deducted from effective gross income, before debt service and taxes.

Operating Expenses

Recurring costs required to operate and maintain a property, excluding debt service and capital expenditures.

Operating Margin

The percentage of revenue remaining after operating expenses are paid.

Other Income

Supplemental revenue streams beyond base rent, often categorized separately for reporting purposes.

Rent Roll

A detailed record of tenants, lease terms, rental rates, and income generated by a property.

Revenue Stability

The predictability and consistency of income over time, influenced by lease terms and tenant quality.

Variable Expenses

Costs that fluctuate based on occupancy or usage, such as utilities and repairs.