What Is NOI – Net Operating Income

NOI stands for Net Operating Income. Which is the gross income less vacancy and less expenses?  Debt service is not included.  Expenses included: (not a complete list) 

  • Real Estate Taxes
  • Insurance
  • Utilities – Gas & Electric
  • Water
  • Sewer & Trash
  • Repair & Maintenance
  • Administrative Fees
  • Management Fees

From the example below.  You have effective gross rent of $214,927 less expenses of $89,141 which leaves $125,786 for your NOI.  

From the $125,786 you service your debt (if applicable).