Net Operating IncomeNOI
Quick answer
Net operating income (NOI) is a property's effective gross income less operating expenses, before debt service, capital expenditures, and taxes on income.
NOI is the standard measure of a commercial property's earning power. It includes rent and other recurring income net of vacancy, less operating expenses such as property taxes, insurance, management, utilities, repairs, and reserves. NOI excludes debt service, depreciation, and capital expenditures so that assets can be compared independent of how they are financed.
Formula
NOI = Effective Gross Income − Operating Expenses
Related product: Acquisition Financing
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