Want to learn more about Gross Operating Income? Check out The Ultimate Guide to Gross Operating Income for Rental Properties where we will start with the basics and dig into more advanced and nuanced discussions.
Gross Operating Income, often abbreviated GOI, is the Gross Potential Income that a property could generate minus the Vacancy on the property.
Gross Potential Income is the most you could possibly receive on the rental property if you collected all the income generated on the property. It is defined as:
We define Vacancy as:
Calculating Gross Operating Income
The following walks you through calculating Gross Operating Income on a rental property.
Annual Gross Operating Income
| Annual Gross Potential Income | $27,720 | |||
| - | Annual Vacancy Dollar | - | $832 | |
| Annual Gross Operating Income | = | $26,888 |
Gross Operating Income unlike Gross Potential Income does take into account the impact of vacancy on the property.
For 
Typical 25% Down Payment Gainesville, Florida Rental Property, we're estimating that the property is vacant 3% of the time. That means that we're not seeing $831.60 of the $27,720 that we thought we might get from the property.
Annual Gross Operating Income
| Annual Gross Potential Income | $27,720 | |||
| - | Annual Vacancy Dollar | - | $832 | |
| Annual Gross Operating Income | = | $26,888 |
Tertiary Input
Gross Operating Income Tertiary is considered a tertiary input in the Hierarchy of Real Estate Metrics.
It is used to calculate Tertiary.
I will be added to this with a future update:
- Show where GOI is located on the spreadsheet and include images of the spreadsheet
- Link to the other ultimate guides we have on the other terms
- Show charts from REFP for 5%, 20% with 1 property and 10 properties comparing them in charts and discussing
- Show how having irregular income and vacancy can impact Gross Operating Income
- Show how Gross Operating Income is used in Net Operating Income
- Show how it is calculated with an example and with REFP charts
