The ratio of net operating income to effective gross income is known as what?

The ratio of net operating income to effective gross income is known as the income efficiency ratio. This metric is crucial in real estate as it indicates how well a property is generating income relative to its potential. Effectively, it reflects the property's operational efficiency in maintaining income after accounting for vacancies and other operational factors.

The income efficiency ratio is an important tool for investors and property managers, as it helps assess the profitability of real estate investments. A higher ratio suggests that a property is effectively converting gross income into net operating income, which is a positive sign of successful property management.

Although the other options may seem relevant at first glance, they do not accurately describe this specific calculation. The net income ratio and gross income ratio refer to different aspects of a property's financial performance, whereas the operating ratio generally pertains to expenses in relation to revenues rather than focusing solely on net operating income. These distinctions are essential for understanding how different metrics are used in real estate financial analysis.