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 After Repair Value (ARV): The Investor's Guide
Learn how to accurately calculate after repair value (ARV) for fix-and-flip and BRRRR deals — including comp selection, adjustment methods, common mistakes, and real-world examples.
How to Analyze a Multi-Family Property
A step-by-step guide to analyzing multi-family properties — from small duplexes to large apartment buildings — including income valuation, expense analysis, and per-unit metrics.
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.
Master Real Estate Investing
Get weekly deep-dives on concepts like net operating income (noi), deal analysis frameworks, and investment strategies. Free, no spam.