Rental income of persons is the net income of persons from the rental of property. It consists of the net income from the rental of tenant-occupied housing by persons, the imputed net income from the housing services of owner-occupied housing, and the royalty income of persons from patents, copyrights, and rights to natural resources. It does not include the net income from rental of tenant-occupied housing by corporations (which is included in corporate profits) or by partnerships and sole proprietors (which is included in proprietors’ income). Like other measures of income in the national income and product accounts (NIPAs), rental income of persons measures income from current production and excludes capital gains or losses resulting from changes in the prices of existing assets.
For tenant-occupied property, rental income of persons is the net income of the landlord from current production. It is calculated as the output of housing services (space rent) less the related expenses, such as depreciation, maintenance and repairs, property taxes, and mortgage interest.
For owner-occupied property, the national income and product accounts treat the owner-occupant as if it were a rental business. That is, BEA imputes a value for the services of owner-occupied housing (space rent) based on the rents charged for similar tenant-occupied housing and this value is included in GDP as part of personal consumption expenditures. Similarly, the expenses associated with owner-occupied housing, such as depreciation, maintenance and repairs, property taxes, and mortgage interest, are deducted from the imputed services to derive the value of rental income of persons. This imputation is necessary in order for GDP to be invariant when housing units shift between tenant occupancy and owner occupancy.
Detailed information on rental income of persons is shown in table 7.9; the relationship between housing services and rental income is shown in table 7.4.5, and the imputation of owner-occupied housing is shown in lines 133-140 of table 7.12.