NOI Calculator
Calculate Net Operating Income for any rental property in seconds. Enter your rent and expenses — get your NOI, cap rate, and full income breakdown instantly.
Your property
Enter the details
Do not include mortgage payments — NOI is calculated before debt service.
What is Net Operating Income?
Net Operating Income (NOI) is the annual income a rental property generates after subtracting all operating expenses — but before mortgage payments or income taxes. It's the starting point for virtually every real estate financial analysis.
NOI matters because it strips away financing decisions and owner-level taxes to reveal what the property itself actually produces. This makes it possible to compare any two properties on equal terms, regardless of how they're financed.
Formula
NOI = Effective Gross Income − Operating Expenses
Effective Gross Income = Gross Rent × (1 − Vacancy Rate)
Operating Expenses = All costs EXCEPT mortgage and CapEx
What Goes Into Operating Expenses?
Getting NOI right depends on knowing what to include and what to leave out.
Property management
Typically 8–12% of gross rent
Maintenance & repairs
Budget 1% of property value per year
Property taxes
Check local rates — often 1–2% annually
Insurance
Landlord policy, not homeowner's insurance
HOA fees
If applicable to your property
Vacancy allowance
Already applied via the vacancy rate field
Mortgage / debt payments
NOT included — NOI is pre-debt
Capital expenditures
Optional: some investors add a CapEx reserve
Depreciation
Tax benefit — not a cash expense
Income taxes
Investor-level item, not property-level
Frequently Asked Questions
What is Net Operating Income (NOI)?+
NOI is the annual income a rental property generates after paying all operating expenses — but before any mortgage payments or taxes. It's the clearest measure of a property's income-producing ability, independent of how it's financed or who owns it.
Why doesn't NOI include mortgage payments?+
Because mortgage payments are a financing decision, not a property operating cost. Two investors buying the same property with different down payments would have different debt payments — but the property's actual income doesn't change. By excluding debt, NOI lets you compare properties on equal footing.
How is NOI used to value real estate?+
NOI is the foundation of commercial real estate valuation. Appraisers use the cap rate method: Property Value = NOI ÷ Cap Rate. If a building generates $60,000 NOI and similar properties trade at a 6% cap rate, its implied value is $1,000,000. This approach is used for apartment buildings, office, retail, and industrial properties.
What's the difference between NOI and cash flow?+
NOI stops before debt service (mortgage payments). Cash flow subtracts the mortgage: Cash Flow = NOI − Annual Debt Service. A property with positive NOI can still have negative cash flow if the mortgage payments exceed the NOI — which is why DSCR (NOI ÷ Debt Service) matters so much.
Should I include capital expenditures in my NOI calculation?+
Strictly speaking, CapEx (major repairs like roofs, HVAC, appliances) is not included in standard NOI — it's treated as a balance sheet item. However, prudent investors add a CapEx reserve to their expenses (typically 5–10% of gross rent) to get a more conservative and realistic picture of true operating costs.