Net Operating Income (NOI)
The total income generated by a property after deducting all operating expenses, but before deducting mortgage payments, capital expenditures, and income taxes.
NOI Formula
NOI = Gross Rental Income - Operating Expenses
Operating expenses include property taxes, insurance, property management fees, maintenance, utilities (if owner-paid), and vacancy reserves. Mortgage payments are NOT included in operating expenses because NOI measures the property's performance independent of financing.
Apply This Concept
Related Articles
How to Calculate ROI on Rental Property: 4 Methods Every Investor Should Know
Most investors rely on a single ROI metric — and get burned. Learn how to use all four methods together to evaluate any rental property deal with confidence.
How to Calculate NOI: A Step-by-Step Guide for Real Estate Investors
Net Operating Income is the single most important number in rental property analysis. Learn exactly how to calculate it with a real-world example.
Understanding Cap Rate Compression: What It Means for Your Portfolio
Cap rate compression quietly erodes returns while prices climb. Learn what drives it, how to spot it early, and how to protect your portfolio.
How to Use the BRRRR Calculator to Vet Deals Faster
Learn how to use a BRRRR calculator to vet rental deals faster, avoid costly mistakes, and maximize your returns with real numbers.
Master Real Estate Investing
Get weekly deep-dives on concepts like net operating income (noi), deal analysis frameworks, and investment strategies. Free, no spam.