Free Net Operating Income Calculator
Calculate net operating income by subtracting all operating expenses from effective gross income.
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Net Operating Income
$49,668
Effective Gross Income$70,308
Total Operating Expenses$20,640
Operating Expense Ratio29.4%
Net Operating Income vs Gross Rental Income
Net Operating Income (NOI)
NOI is the most important metric in commercial real estate. It represents the income a property generates after all operating costs but before debt service and income taxes.
Formula
NOI = Effective Gross Income - Total Operating Expenses
Where:
Example Calculation
A rental property earns $72,000 gross rent plus $3,600 other income, with 7% vacancy and $20,640 total expenses.
- 01Gross potential income: $72,000 + $3,600 = $75,600
- 02Vacancy loss: $75,600 x 7% = $5,292
- 03Effective gross income: $75,600 - $5,292 = $70,308
- 04Total expenses: $6,000 + $2,400 + $4,800 + $5,040 + $2,400 = $20,640
- 05NOI: $70,308 - $20,640 = $49,668
- 06Expense ratio: $20,640 / $70,308 = 29.4%