Direct answer
What does Potential gross income mean?
The income a property could produce at full occupancy before vacancy and collection loss.
Exam cue: Start with scheduled rent and other potential income before reducing for vacancy.
What does it look like in a question?
New York example
10 apartments at $2,000 monthly produce $240,000 annual potential rent before vacancy.
Common exam trap
What should you not confuse it with?
Potential gross income is not the amount actually collected.
Related commercial and investment terms
Cash flowMoney remaining or changing hands during a period after the receipts and payments included in the stated calculation.Effective gross incomeIncome expected or received after vacancy and collection loss, plus other property income included in the analysis.Gross leaseA lease in which the landlord pays specified property operating expenses from the rent received.LeverageThe use of borrowed money to finance part of an investment.LiquidityThe ease and speed with which an asset can be converted to cash without a substantial loss in value.Net leaseA lease under which the tenant pays specified property expenses in addition to rent.
Sources used1 reference with section locators
The curriculum citation confirms exam scope. Definition and rule citations support the explanation itself. Links and locators were checked on August 26, 2026.
Keep learning
Put the term back into its full subject.
A definition helps with recall. The subject guide shows how the rule interacts with documents, scenarios, calculations and practice questions.