Net Operating Income (NOI)
Also called: NOI, Net Operating Income
A rental property's gross income minus operating expenses, excluding debt service, depreciation, and capital expenditures.
NOI = Gross Rental Income - Operating Expenses (excluding debt service, depreciation, CapEx)
Full definition
NOI is the standard cash-flow figure for evaluating a rental property. It captures the income the property produces after paying property taxes, insurance, repairs, management, and utilities — but before mortgage payments and depreciation. NOI is the numerator in cap rate calculations and the primary income figure lenders use to underwrite investment property loans. Solo landlords calculate NOI monthly to spot expense creep before it becomes a problem.
Used for
- property valuation
- loan underwriting
- portfolio performance tracking
Sources
Related SailsAndShore resources
Workbooks
- Real Estate Investor Portfolio · $8.63
- Rental Property Landlord Toolkit · $8.63
Free calculators
- Cap Rate Calculator — Type in the numbers. Get the cap rate. Decide if it pencils.
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