What is the formula to calculate Rent Collections?

To calculate Rent Collections, the appropriate formula is based on determining the effective income that can be collected from a property. This involves starting with the potential gross income, which represents the total amount of rent that could be collected if the property were fully leased without any interruptions or losses.

However, in real-world situations, not all potential income can be realized due to factors such as vacancies and bad debts, which is represented by vacancy and collection loss. By subtracting this expected loss from the potential gross income, you arrive at the actual rent collections that the property owner can anticipate receiving. This means that the formula accurately reflects the practical income that can be expected after accounting for potential losses, allowing property appraisers and owners to better understand the financial performance of their investment.

The other options do not represent the correct method for calculating Rent Collections since they either add losses to gross income or apply mathematical operations that do not serve the purpose of financial evaluation in this context.