In the eight-unit example, which income source is not reduced by the vacancy factor when calculating the effective gross income?

• A. Laundry and vending income
• B. Rent from units
• C. Parking income
• D. Late fees

Answer: (A)

Vacancy factor is an adjustment for lost rent due to unoccupied units. It directly reduces the rent you would collect from rental units, not income that comes from other services or sources. In the eight-unit example, you calculate potential gross income by adding rental income (if all units were rented) to other income sources like laundry and vending. Then you apply the vacancy loss to the rental income portion only. Because laundry and vending income comes from non-rental services, it isn’t diminished by vacancy; it remains at its potential level when computing effective gross income.