What does the formula for calculating gross rental income include?

The formula for calculating gross rental income focuses on the total income generated from rental properties before any expenses are deducted. This includes all of the rental payments received from tenants, which represents the gross amount prior to accounting for operational costs, vacancies, or other expenditures.

Option B accurately captures this concept as it specifies the total rental income received, which is essential for determining gross rental income. Understanding gross rental income is crucial for property owners and investors, as it provides a clear picture of potential revenue from rental activities without the influence of costs that could diminish cash flow.

Other options do not align with the definition of gross rental income. For instance, net income after expenses considers deductions, making it a different metric focused on profitability rather than gross income. Projected rental income over a specific timeframe like five years involves forecasting and is not representative of actual received income. Finally, dividing monthly income by tenant lease agreements does not yield a figure that represents gross rental income; it strays from the focus of total income received, which is essential for this calculation.