GROSS RENTAL Meaning and
Definition
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Gross rental refers to the total amount of rental income generated from a property before any deductions, expenses, or overhead costs are taken into account. It represents the full revenue generated from the rental property without considering the expenses associated with the property's operation, maintenance, or management.
Gross rental is typically calculated on a monthly or annual basis and encompasses all rental income received from tenants, including base rents, additional fees, and charges. It does not include any additional income generated from sources other than rent, such as late payment fees or income from on-site facilities like parking or laundry.
This figure is significant for property owners and investors as it gives them an overview of the property's revenue-generating potential. However, it does not provide an accurate representation of the property's profitability as it does not factor in expenses such as property taxes, insurance, repairs, maintenance, and management fees.
Ultimately, gross rental serves as a starting point for determining a property's financial performance, providing an understanding of the total rental income generated. To assess the actual profitability or net income from the property, deductions for expenses are subtracted from the gross rental amount, resulting in the net rental income.
Etymology of GROSS RENTAL
The word "gross rental" is composed of two main components: "gross" and "rental".
- "Gross" originates from the Old French word "gros" meaning "big, large". It entered English in the 14th century, referring to the magnitude or extent of something. Over time, it developed multiple meanings, including "entire, whole, total". In the context of finances, "gross" commonly denotes the total amount before deductions or expenses are considered.
- "Rental" comes from the Old French word "rentel", which derives from the Latin word "rendere", meaning "to yield or produce". The term entered English in the 15th century, referring to the act of renting or leasing property or goods for a specified period in exchange for payment.
