O'Reilly logo

What Every Real Estate Investor Needs to Know About Cash Flow... And 36 Other Key Financial Measures, Updated Edition, 2nd Edition by Frank Gallinelli

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

CHAPTER 15Calculation 9: Net Operating Income

What It Means

Net operating income (NOI) is a property’s income after being reduced by vacancy and credit loss and all operating expenses. Mathematically, it is a property’s gross operating income less the sum of all operating expenses.

NOI represents a property’s profitability before consideration of taxes, financing, or recovery of capital. Perhaps easier is to think of it as the number of dollars a property returns in a given year if the property is purchased for all cash and if there is no consideration of income taxes or depreciation.

NOI is one of the most important calculations you’ll make in regard to any real estate investment. If you revisit Part I, Chapters 2 through 5 of this book, you’ll ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required