Free Net Operating Income Calculator

Net Operating Income (NOI) is the annual cash profit a property generates before paying debt and taxes. It’s calculated as all annual rental and related income minus all annual operating expenses. In simpler terms, NOI shows how much money a property makes just by being managed (ignoring financing). It’s a baseline profitability metric used by investors and lenders.

To calculate NOI, total up your annual income (gross rents plus any other property income) and subtract your annual operating expenses. 

The formula is NOI = Total Revenue – Total Operating Expenses. 

For example, if your rents and fees add up to $30,000/year and your combined expenses are $12,000/year, then NOI = $30,000 – $12,000 = $18,000. You can do this manually or use Landlord Studio’s free NOI calculator to automate the math.

Include all recurring property income (rent, parking, laundry, pet fees, etc.) and all normal recurring costs (taxes, insurance, maintenance, utilities you pay, management fees, etc.). 

Exclude personal or financing costs: do not count mortgage payments, capital project costs (major repairs or upgrades), depreciation, or income taxes. NOI focuses only on operating results, so anything outside day-to-day operations is left out.

No. NOI is a “pre-debt” figure. It measures profit after expenses but before financing costs. Cash flow, by contrast, takes NOI and then subtracts mortgage principal and interest (and often reserves or capital costs). 

So, cash flow is what hits your bank after paying the loan each month. Think of NOI as the foundation, cash flow is NOI minus debt service.

• Treating capital improvements as expenses: Do not include major upgrades (new roof, full renovation, adding a room, etc.) in your annual expenses. Those are capital expenditures and should be excluded from NOI.
  
• Using full theoretical rent instead of actual: Always base NOI on actual rental income collected. Don’t assume 100% occupancy or potential rent (factor in the usual vacancy, concessions, or bad debts).
• Forgetting hidden or irregular costs: It’s easy to overlook recurring items (like a small maintenance contract or spare parts for equipment). Hidden costs can erode NOI if not counted.
• Always review past expense statements to capture everything (utilities, HOA fees, periodic maintenance funds, etc.).
  
• Including financing or one-time costs: Remember that mortgage payments, interest, depreciation, legal fees, or insurance claim proceeds belong outside NOI. Including loan payments or depreciation invalidates the calculation.
• Keep NOI purely about operating profit.
• Under estimating maintenance costs. You can use the 1% rule to estimate maintenance costs. this stipulates that you will spend 1% of the property value each year on maintenance.
• Not adding a an expense contingency. Unexpected expenses do happens, but they can be impossible to predict. Investors who don't budget for them can quickly find themselves cash flow negative. When using our NOI calculator, try adding a budget for unexpected expenses to see if your investment still makes sense if things go wrong.
• Not leveraging other metrics. To get a full picture you should run a broad property analysis. Here are 11 metrics investors can use.
  
• Aiming for a secific NOI and not taking into account broader property and market factors. Unlike a percentage, NOI itself has no universal “good” benchmark; it depends on the property type and local market. What matters is the NOI relative to what you paid. Often, investors look at the resulting cap rate: higher NOI or a higher cap rate (NOI divided by cost) indicates better yield.
  
  In practice, you want NOI to be comfortably above all operating and financing costs, and high enough to meet your target return. If you bought at a good price so that your NOI generates the returns you need, then it’s a good outcome.