What are the two main types of gross income considered when forecasting PGI?

The correct answer highlights the distinction between contract rent and market rent. Contract rent refers to the actual rental income being generated from a property based on existing leases or rental agreements. This is the amount that tenants are currently obligated to pay. On the other hand, market rent represents the amount a property could reasonably command in an open market, based on current demand and supply conditions, regardless of what is specified in the lease agreements.

Understanding these two types is essential for forecasting Potential Gross Income (PGI), as it allows property managers and investors to assess not only what they are currently earning but also what they could potentially earn if the property were to reflect the market conditions more accurately. This helps in making informed decisions regarding investments, property improvements, and strategy adjustments necessary for maximizing income potential.

The other options lack this clarity on the economic principles at play. Actual rent and estimated rent are terms that may overlap but do not distinctly capture the concepts of existing contractual obligations versus market conditions. Fixed rent and variable rent focus more on the structure of rent agreements rather than their economic potentials. Current income and potential income, while relevant, do not specifically address the critical comparison between actual lease terms and market conditions that are pivotal for forecasting PGI accurately.