The Ultimate Guide to Net Operating Income

If you're looking to learn more about Net Operating Income (also abbreviated as NOI) then check out our Ultimate Guide to Net Operating Income.

Net Operating Income = Gross Operating Income – Operating Expenses

NOI is defined as the Gross Operating Income minus Operating Expenses.

Calculating Net Operating Income

The following walks you through how to calculate NOI on rental properties.

Annual Net Operating Income

Annual Gross Operating Income $26,888
- Annual Operating Expenses - $10,097
Annual Net Operating Income = $16,791

Net Operating Income is how much money you're making from the property after vacancy and all the Operating Expenses except for the financing expenses on the property (like the mortgage payment and, if applicable, private mortgage insurance).

For Typical 25% Down Payment Gainesville, Florida Rental Property we would use the Gross Operating Income of $26,888.40 per year and subtract out all the Operating Expenses of $10,097.44 for the year.

That would result in a Net Operating Income of $16,790.96 per year or $1,399.25 per month.

Annual Net Operating Income

Annual Gross Operating Income $26,888
- Annual Operating Expenses - $10,097
Annual Net Operating Income = $16,791

I will be adding to this page in the future:

  • Show where NOI is located on spreadsheet and walk through the calculation of it using the spreadsheet and images
  • Show REFP charts of Net Operating Income for buying one 20% down payment rental property
  • Show REFP charts of Net Operating Income for buying one 5% down payment Nomad™ property
  • Show REFP charts of Net Operating Income for buying ten 20% down payment rental properties
  • Show REFP charts of Net Operating Income for buying ten 5% down payment Nomad™ properties
  • Compare NOI for Nomad™ to 20% down rentals
  • Show pie chart showing breakdown of Gross Operating Income and pie chart showing breakdown of Operating Expenses
  • NOI is the amount of debt the property can support
  • Discuss using NOI when making creative owner financing offers
  • Debt Service Coverage Ratio
  • Impact of variable income and expenses on NOI (monte carlo for REFP)

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