Net Operating Income Calculator
Calculate the net operating income on an investment property - effective gross income less operating expenses, before financing and tax.
How to manually calculate net operating income
Take vacancy loss off your gross rent to get effective gross income, then take off operating expenses. Mortgage payments never belong in the calculation.
Start with gross annual rent
Everything the property would collect fully occupied, plus any other income.
Subtract vacancy loss
Use your actual vacancy or a market assumption, not a best case.
Subtract operating expenses
Tax, insurance, repairs, management and utilities. Not mortgage, not capital improvements.
Worked example
A rental grossing $36,000 a year, with $1,800 of vacancy loss and $12,600 of operating expenses.
Effective gross income = $36,000 − $1,800 = $34,200
Net operating income = $34,200 − $12,600 = $21,600
Other calculators you might be interested in
Cap Rate Calculator
Turn your NOI into a cap rate so you can compare deals on an unleveraged basis.
Rental Yield Calculator
Gross and net yield, cash flow and cash-on-cash return on a rental property.
70% Rule Calculator
Screen a flip or BRRRR deal fast with the 70% rule maximum offer formula.
Manage up to 3 rental properties for free!
Sign up and get PRO free for 14 days. When the trial ends, keep tracking rent, expenses and reports for up to 3 properties, free forever with Landlord Studio GO.
By continuing you agree to our Terms & Conditions. · Already have an account? Log in
Understanding net operating income
Net Operating Income Calculator
NOI measures what the property earns before financing, so two investors buying the same building get the same NOI regardless of how much they borrowed. That's what makes it the basis for cap rate and for lender underwriting.
The expenses people forget
Leaving out vacancy, management and a maintenance reserve is the quickest way to overstate NOI. If you self-manage, still price management in - your time has a cost, and a buyer will underwrite it anyway.
Why should you use our NOI calculator?
- Separates operating costs from financing, the way lenders and appraisers do
- Applies vacancy to get effective gross income, not just asking rent
- Shows the operating expense ratio so you can sanity-check your numbers
- Gives you the cap rate at the same time if you enter a purchase price
- Free, fast and no sign-up
FAQs
What is net operating income (NOI)?
Net operating income is what a property earns after operating expenses but before financing and income tax. It's the standard way to judge a property on its own merits, independent of how you paid for it.
NOI = effective gross income - operating expenses.
What counts as an operating expense for NOI?
Include property taxes, insurance, property management, repairs and maintenance, utilities you pay, HOA dues, landscaping, and a realistic reserve for turnover.
Exclude mortgage principal and interest, depreciation, capital expenditures and income tax. Those are financing and tax items, not operating costs - putting them in is the most common way NOI gets calculated wrong.