Potential gross income minus a vacancy and collection loss equals?

The term that accurately describes potential gross income minus a vacancy and collection loss is effective gross income. This metric is essential in evaluating the performance of income-generating properties because it reflects a more realistic view of the revenue a property can generate after considering losses from vacancies and tenants who do not pay rent.

Potential gross income is the total income a property could generate if it were fully rented out at market rates. However, in practice, not all units are always rented, and some tenants may fail to pay their rent. By subtracting vacancy losses and uncollected rents from the potential gross income, effective gross income provides a clearer picture of expected rental income, which is crucial for financial analysis and operational planning.

Net operating income, while related, comes into play after operating expenses are deducted from effective gross income. Adjusted gross income generally refers to income after certain deductions from gross income, but does not specifically account for vacancy and collection losses. Market value relates to the overall worth of the property in the real estate market and does not directly derive from the income calculations. Therefore, effective gross income is the correct answer as it accurately captures the essence of the calculation involved in this scenario.