Income Waterfall

Calculates effective gross income for a rental property by walking gross potential rent down through vacancy, loss to lease, credit loss, and concessions, then adding other income. Inputs include unit count, market rent, vacancy and credit loss percentages, loss to lease, concessions, and other income, with presets for stabilized, lease-up, and stressed properties.

Interactive Tool

Income Waterfall Calculator

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Inputs

Number of units

Market rent ($/unit/mo)

General vacancy

Loss to lease (annual)

Credit loss

Concessions (annual)

Other income (annual)

Waterfall

Gross Potential Rent

100 units × $2,000/mo × 12

$2,400,000

General Vacancy

4.0% of GPR

−$96,000

Loss to Lease

Below-market contract rents

−$60,000

Credit Loss

1.5% of GPR

−$36,000

Concessions

Free rent / move-in specials

−$100,000

Other Income

Parking, RUBS, pet rent, storage

+$120,000

Effective Gross Income

Net Rental Revenue + other income

$2,228,000

Revenue Loss

−$292,000

12.2% of GPR

Final EGI

$2,228,000

92.8% of GPR

Per Unit / Month

$1,857

Effective rent

Learn the concept

This calculator comes from the free Real Estate Finance course, where the concept is taught with readings, worked examples, and practice questions.

Open Real Estate Finance

Built by Devon Coombs, CPA, MBA, Teaching Professor of Finance at Santa Clara University.