1. What is Gross Potential Rent?

Gross Potential Rent represents the maximum potential rental income a property could generate if fully leased at market rates.

2. How Does the Calculator Work?

The calculator uses the Gross Potential Rent formula:

Where:

• \( GPR \) — Gross Potential Rent ($)
• \( U \) — Number of Units Available for Rent
• \( MR_{annualised} \) — Annualised Market Rent ($/year)

Explanation: This formula calculates the maximum potential rental income by multiplying the number of available units by the annual market rent per unit.

3. Importance of GPR Calculation

Details: Calculating Gross Potential Rent is essential for property valuation, investment analysis, and financial planning in real estate. It helps investors and property managers understand the maximum revenue potential of a property.

4. Using the Calculator

Tips: Enter the number of available rental units and the annual market rent per unit. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is the difference between Gross Potential Rent and Effective Gross Income?
A: Gross Potential Rent represents maximum potential income at 100% occupancy, while Effective Gross Income accounts for vacancy losses and credit losses.

Q2: How often should GPR be calculated?
A: GPR should be calculated regularly, especially when market rents change or when units become available/unavailable for rent.

Q3: Does GPR include additional income sources?
A: No, GPR only includes rental income from the primary units. Additional income sources like parking fees or laundry income are calculated separately.

Q4: How does vacancy affect GPR?
A: GPR assumes 100% occupancy. Actual income will be lower if there are vacant units.

Q5: Should market rent be adjusted for unit size differences?
A: Yes, if units have different sizes or features, you may need to calculate weighted average rent or calculate GPR for each unit type separately.