Potential Gross Income (PGI) Calculator

About the Potential Gross Income (PGI) Calculator

Potential Gross Income (PGI), also called Gross Scheduled Income (GSI), represents the maximum possible rental revenue a property can generate if every unit is occupied and every tenant pays the full scheduled rent. PGI is the starting point for all income-based property analysis and valuation.

For a 10-unit apartment building with rents ranging from $1,000 to $1,400/month, PGI is the sum of all units' monthly rents multiplied by 12. This gives you the theoretical ceiling — actual income will be lower once you account for vacancy, credit loss, and concessions.

Knowing your PGI also reveals "loss-to-lease" — the gap between what tenants currently pay and what the units could rent for at market rate. This represents untapped revenue that can be captured through strategic rent increases at renewal.

Homebuyers, investors, and real-estate professionals all benefit from precise potential gross income (pgi) figures when evaluating properties, negotiating deals, or planning long-term investment strategies. Save this calculator and revisit it whenever market conditions or your financial situation changes.

When This Page Helps

PGI is the foundation of every real estate financial analysis. You can't calculate EGI, NOI, cap rate, or cash-on-cash return without first establishing PGI. This calculator makes it easy to compute PGI for multi-unit properties.

How to Use the Inputs

1. Enter the number of distinct unit types (e.g., studio, 1BR, 2BR).
2. For each unit type, enter the count and monthly rent.
3. Optionally enter any non-rental income.
4. View the total monthly PGI, annual PGI, and per-unit average.
5. Compare scheduled rents to market rents to find loss-to-lease.

Example Calculation

Tips & Best Practices

• Always use market rent (not current in-place rent) for PGI when evaluating acquisitions.
• If in-place rents are below market, the difference is "loss-to-lease" — a value-add opportunity.
• Include all rentable spaces: residential units, parking spots, storage units, commercial spaces.
• Update PGI annually using market rent surveys or comparable rent data.
• For mixed-use properties, separate PGI into residential and commercial components.
• PGI is a theoretical number — never use it alone for investment decisions. Always compute EGI and NOI.

PGI as the Foundation

Every income metric builds on PGI: EGI = PGI − Vacancy − Credit Loss + Other Income. NOI = EGI − Expenses. Cash Flow = NOI − Debt Service. If your PGI calculation is wrong, every downstream number is wrong. Get this right first.

Market PGI vs. In-Place PGI

The gap between market PGI and in-place PGI represents your value-add opportunity. If market PGI is $150,000 and in-place PGI is $132,000, that $18,000 gap can be captured over 1–3 years through strategic renewals. This is exactly how value-add investors create equity.

Trend Analysis

Plot your PGI (both market and in-place) over 3–5 years. Market PGI should grow with the local rental market (3–5%/year). In-place PGI should grow faster if you're actively reducing loss-to-lease. If in-place PGI is flat while the market grows, you're leaving money on the table.

Frequently Asked Questions

• What is the difference between PGI and GSI?

  Potential Gross Income (PGI) and Gross Scheduled Income (GSI) are essentially the same: the total rent if all units are occupied at their scheduled or market rate. Some analysts use "PGI" for market rents and "GSI" for in-place rents, but the terms are generally interchangeable.

• Should I use current rents or market rents for PGI?

  Use market rents for acquisition analysis and valuation (this shows true potential). Use current in-place rents for operating budgets and cash flow tracking (this reflects current reality). The difference is loss-to-lease.

• What is loss-to-lease?

  Loss-to-lease is the difference between market rents and actual in-place rents. If market rent is $1,200 and a tenant pays $1,100, the loss-to-lease is $100/month. Across a portfolio, loss-to-lease can represent significant untapped revenue that's recovered through renewal increases.

• Does PGI include parking and other income?

  There are two conventions. Purists define PGI as rental income only, with parking/storage/laundry classified as "other income" added to EGI. Others include all scheduled revenue in PGI. Both are valid — just be consistent.

• How does PGI relate to property value?

  Property value = NOI / Cap Rate. Since NOI = EGI − Expenses and EGI derives from PGI, higher PGI flows through to higher value. Increasing PGI by $10,000/year at a 6% cap rate adds ~$167,000 in value.

• How often should I recalculate PGI?

  Recalculate PGI annually using current market rent comps. Also recalculate after renovations that justify higher rents, after significant market shifts, and when preparing for refinancing or sale.