Net operating income (NOI) calculator.

NOI is the engine of every valuation — income after operating expenses, before financing and taxes. Enter your income and costs to get NOI, effective gross income, and your expense ratio.

Gross rental income (annual)

Other income (parking, signage…)

Vacancy & credit loss

Operating expenses (annual)

Net operating income

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Effective gross income

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Operating expenses

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Expense ratio

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NOI = effective gross income − operating expenses. It excludes debt service, income tax, depreciation, and capital expenditures — the property’s income before financing. Value ≈ NOI ÷ cap rate, so a small NOI change moves value a lot.

What net operating income tells you

Net operating income is the single most important number in commercial real estate, because value flows directly from it. It is the property’s total income after operating expenses but before your mortgage, income taxes, depreciation, and capital projects. Start with gross rental income, subtract a realistic vacancy and credit-loss allowance to get effective gross income, add any other income like parking or signage, then subtract every operating expense the owner is responsible for.

Example. A small office building collects $300,000 in gross rent plus $12,000 of parking income. At a 5% vacancy allowance, effective gross income is $297,000. Subtract $90,000 of operating expenses and NOI is $207,000. At a 6.5% market cap rate, that NOI implies roughly a $3.18 million value — which is why sharpening the expense line matters so much.

Frequently asked questions

What is net operating income (NOI)?

NOI is a property’s annual income after operating expenses but before debt service, income taxes, depreciation, and capital expenditures. It equals effective gross income (rent and other income, minus vacancy and credit loss) minus operating expenses like taxes, insurance, management, utilities, and maintenance.

Does NOI include the mortgage payment?

No. NOI is calculated before financing, so it does not include mortgage principal or interest. That’s intentional — it lets you compare properties independent of how each is financed. Debt service is subtracted after NOI to get cash flow.

How is NOI used to value a property?

Value ≈ NOI ÷ cap rate. For example, $150,000 of NOI at a 6.5% cap rate implies roughly a $2.3M value. Because value is so sensitive to NOI, verify the income and expense assumptions against real comparables before relying on the number.

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Estimates are for planning only and use simplified assumptions — not tax, legal, or investment advice. Verify with your lender, CPA, and a full broker analysis before acting.