Net Operating Income Calculator

Understanding NOI

• What is NOI?: Net Operating Income (NOI) is the income a property earns after paying its regular operating expenses. It does not include mortgage payments or income taxes.
• What Vacancy Rate Should You Use?: A 5–10% vacancy rate is commonly used for residential properties, while 10–15% may be suitable for commercial properties.
• NOI vs. Cash Flow: NOI and cash flow are not the same. NOI is calculated before mortgage payments, while cash flow is what remains after paying the mortgage and other expenses.
• Why Is NOI Important?: NOI helps you understand how profitable a property is and is also used to estimate property value using the cap rate.
• How Can You Increase NOI?: You can improve NOI by increasing rental income, reducing vacancy, controlling operating expenses, or adding new income sources such as parking or storage.