NOI measures a property’s profitability before financing and taxes. Lenders use it for the debt service coverage ratio, and buyers divide it by the cap rate to estimate value.
How to use the Net Operating Income Calculator
- Annual rental income (at full occupancy)
- Other income (parking, laundry)
- Occupancy rate
- Property tax
- Property management fees
- Insurance
- Maintenance
- Repairs
- Other operating expenses (utilities, admin)
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the rental income, other income, occupancy and each operating expense for the year.
Tips
- Get a written loan estimate and compare the APR, not just the interest rate.
- Include property tax, insurance, HOA fees and maintenance in your monthly budget.
- A larger down payment lowers the payment and can remove mortgage insurance.
- Rates change daily – use a current quote for the most accurate result.
Common mistakes to avoid
- Looking only at the monthly payment instead of the total cost of the loan.
- Forgetting closing costs and fees.
- Assuming home prices always rise.
Inputs explained
| Field | What to enter |
|---|---|
| Annual rental income (at full occupancy) | Amount in your currency |
| Other income (parking, laundry) | Amount in your currency |
| Occupancy rate | In % |
| Property tax | Amount in your currency |
| Property management fees | Amount in your currency |
| Insurance | Amount in your currency |
| Maintenance | Amount in your currency |
| Repairs | Amount in your currency |
| Other operating expenses (utilities, admin) | Amount in your currency |
What each result means
- Potential gross income = [Annual rental income (at full occupancy)] + [Other income (parking, laundry)]
- Vacancy loss = [Potential gross income]×(1 – [Occupancy rate]÷100)
- Effective gross income = [Potential gross income] – [Vacancy loss]
- Total operating expenses = [Property tax] + [Property management fees] + [Insurance] + [Maintenance] + [Repairs] + [Other operating expenses (utilities, admin)]
- Net operating income (NOI) = [Effective gross income] – [Total operating expenses]
- Operating expense ratio = [Total operating expenses]÷[Effective gross income]×100
Example values
How the main result changes when Annual rental income changes and everything else stays at the example values above:
| Annual rental income (at full occupancy) | Net operating income (NOI) |
|---|---|
| 60,000 | 18,520 |
| 90,000 | 46,420 |
| 120,000 | 74,320 |
| 150,000 | 102,220 |
| 180,000 | 130,120 |
| 240,000 | 185,920 |
Formula
Potential gross income = area × rent per area + other income (or total rent)Effective gross income = PGI × occupancyNOI = EGI − operating expenses (excluding mortgage, depreciation and capex)Worked example
Inputs — Annual rental income (at full occupancy): $120,000; Other income (parking, laundry): $4,000; Occupancy rate: 93 %; Property tax: $14,000; Property management fees: $9,000; Insurance: $5,000; Maintenance: $6,000; Repairs: $3,000; Other operating expenses (utilities, admin): $4,000.
Results — Potential gross income = $124,000.00; Vacancy loss = $8,680.00; Effective gross income = $115,320.00; Total operating expenses = $41,000.00; Net operating income (NOI) = $74,320.00; Operating expense ratio = 35.55 %.
Frequently asked questions
What is NOI?
Income from a property after operating expenses but before debt service and taxes.
Is the mortgage an operating expense?
No – NOI is calculated before mortgage payments.
What is a typical operating expense ratio?
Around 35–50% of effective gross income for apartments.
What formula does the Net Operating Income Calculator use?
Potential gross income = area × rent per area + other income (or total rent).