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Net Operating Income (NOI):

  • Equals gross operating income less estimated vacancy.
  • Collections & other operating expenses, (including property taxes, but excluding income taxes). NOI does not include depreciation or financing costs.
Example

Calculate the NOI. The information is as follows:
 

Rental Income $300,000
Vacancy rate 5%
Insurance $12,000
Taxes $8,000
Utilities $7,000
Maintenance $18,000

 

Solution

NOI = 300,000 * (1-0.05) – 12,000 – 8,000 – 7,000 – 18,000 = $248,000

 

Example

Calculate the NOI. The information is as follows:
 

Rental Income $300,000
Vacancy rate 5%
Insurance $12,000
Taxes $8,000
Utilities $7,000
Maintenance $18,000

 

Solution

NOI = 300,000 * (1-0.05) – 12,000 – 8,000 – 7,000 – 18,000 = $248,000

 

 





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