Net operating income (NOI) is a rental property’s income after vacancy and operating expenses, before the mortgage. It is the figure a cap rate is built on; the calculator itemizes rent, other income, vacancy and each expense to arrive at it.
Calculate Net Operating Income for rental and commercial properties. Essential for cap rate calculations and investment analysis.
Total monthly rental income
Parking, laundry, storage fees, etc.
Expected vacancy percentage
Note: NOI does NOT include mortgage payments, capital expenditures, or income taxes. Only include operating expenses.
Input monthly gross rent, other income sources, and expected vacancy rate for the property.
Enter monthly costs for taxes, insurance, maintenance, management, and utilities.
Instantly see monthly and annual NOI, expense ratio, and effective gross income.
Effective Gross Income = Gross Income - Vacancy Loss
NOI = Effective Gross Income - Operating Expenses
Net Operating Income (NOI) is one of the most important metrics in real estate investing. Our free NOI calculator helps you quickly determine a property's operating income by subtracting operating expenses from effective gross income. Whether you're analyzing a potential investment, preparing for a real estate exam, or evaluating your current portfolio, this tool provides the insights you need.
NOI is the foundation for several critical investment calculations. It's used to determine cap rate (NOI divided by property value), which helps compare investments. Lenders use NOI to calculate Debt Service Coverage Ratio (DSCR) when qualifying commercial loans. And investors use NOI to value properties using the income capitalization approach.
Only operating expenses are included in NOI calculations - not financing costs or capital expenditures. Operating expenses include property taxes, insurance, maintenance, property management fees, utilities (if owner-paid), and HOA fees. Mortgage payments, major renovations, and income taxes are excluded because they vary by investor, not by property.
A strong NOI indicates a property's ability to generate income from operations. Compare NOI across similar properties to identify the best investment opportunities. Track NOI over time to measure property performance and identify areas for improvement. Remember that increasing NOI through higher rents or lower expenses directly increases property value in the eyes of investors and appraisers.
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Key facts
Net operating income = gross potential rent + other income − vacancy and credit loss − operating expenses (taxes, insurance, management, repairs, utilities, reserves). Mortgage payments, depreciation and income tax are not operating expenses.
NOI of $22,000. At a 6% cap rate the indicated value is 22,000 ÷ 0.06 ≈ $366,700.
NOI leaves out anything that depends on the owner rather than the property: mortgage principal and interest, depreciation, income taxes, capital improvements and the owner’s personal costs. Property tax, insurance, management, maintenance, utilities the owner pays, and a reserve for replacements are included.
The operating expense ratio is operating expenses divided by effective gross income. Small residential rentals commonly run between 35% and 50% depending on who pays utilities, the age of the building and whether management is paid. The calculator itemizes each expense so the ratio is a result, not an assumption.
Last reviewed September 8, 2026 by the EstatePass editorial team. Formulas and program limits are checked against the published rules; figures on this page are arithmetic, not market statistics.
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