Net Operating Income — Smart Financial Analysis
Use this calculator to analyze net operating income and make smarter financial decisions with real-time calculations and visual charts.
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NOI is revenue from a property minus operating expenses. NOI = Gross Rental Income + Other Income - Vacancy - Operating Expenses. Net income subtracts interest, depreciation, and taxes. Cap Rate = NOI ÷ Property Value.
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Why: NOI is revenue from a property minus operating expenses. It excludes debt service, depreciation, and capital expenditures. NOI is the key metric for real estate profitability an...
How: Enter Gross Rental Income ($), Vacancy Rate (%), Property Tax ($) to get instant results. Try the preset examples to see how different scenarios affect the outcome, then adjust to match your situation.
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Revenue vs Expenses
NOI Trend
Expense Breakdown
Property Type Comparison
For educational purposes only — not financial advice. Consult a qualified advisor before making decisions.
💡 Money Facts
Net Operating Income analysis is used by millions of people worldwide to make better financial decisions.
— Industry Data
Financial literacy can increase household wealth by up to 25% over a lifetime.
— NBER Research
The average American makes 35,000 financial decisions per year.
— Cornell University
Globally, only 33% of adults are financially literate, making tools like this essential.
— S&P Global
What is Net Operating Income?
NOI = Revenue - Operating expenses. Real estate profitability before debt and depreciation. Basis for cap rate and property valuation.
Key Takeaways
- NOI excludes debt service and depreciation
- Cap Rate = NOI ÷ Property Value
- 40-50% expense ratio is typical for rentals
Did You Know?
How It Works
Expert Tips
Cap Rate Rule
Value = NOI ÷ Cap Rate. $72K NOI at 6% = $1.2M value.
Exclude CapEx
Capital expenditures (roof, HVAC) are NOT in NOI.
Vacancy Matters
Use 5-8% vacancy for stabilized properties.
NOI vs Cash Flow
Cash flow = NOI - Debt service. NOI is pre-debt.
NOI vs Net Income
| Metric | Excludes |
|---|---|
| NOI | Debt, depreciation, CapEx, taxes |
| Net Income | None (all expenses) |
FAQ
What is net operating income?
NOI is revenue from a property minus operating expenses. It excludes debt service, depreciation, and capital expenditures. NOI is the key metric for real estate profitability and cap rate calculations.
How to calculate NOI?
NOI = Gross Rental Income + Other Income - Vacancy - Operating Expenses. Operating expenses include property tax, insurance, maintenance, utilities, management, but NOT mortgage payments or depreciation.
NOI vs net income?
Net income subtracts interest, depreciation, and taxes. NOI is pre-debt, pre-depreciation. NOI is used for cap rates and property valuation; net income is the accounting bottom line.
How is NOI used for cap rate calculation?
Cap Rate = NOI ÷ Property Value. So Property Value = NOI ÷ Cap Rate. A $72K NOI property at 6% cap rate is worth $1.2M. Higher NOI or lower cap = higher value.
What expenses are excluded from NOI?
Excluded: mortgage/loan payments, depreciation, amortization, capital expenditures (CapEx), income taxes, tenant improvements (sometimes). Included: property tax, insurance, maintenance, utilities, management, repairs.
What is a good NOI for a rental property?
NOI depends on property size and market. Expense ratio (OpEx ÷ Gross Income) of 40-50% is typical. A $120K gross income property might have $48-60K in expenses = $60-72K NOI. Cap rate 6-8% is common.
Key Stats
Sources
Disclaimer: NOI estimates only. Actual expenses vary. Consult a real estate professional for investment decisions.
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