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Net Operating Income Calculator
Build a simple NOI statement for a rental property. Enter the scheduled rent, other income and vacancy, then each operating expense, to see effective gross income, total operating expenses, net operating income and the expense ratio, plus the cap rate if you add a value.
Last updated:
Income
Amounts entered
$
All units at full occupancy.
$
Parking, laundry, storage, pet fees.
% of rent
Operating expenses
$
$
% of EGI
$
$
$
$
$
Enter your values to see the result.
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How to use the Net Operating Income Calculator
- Choose annual or monthly amounts.
- Enter the gross scheduled rent, other income and an expected vacancy rate.
- Fill in operating expenses: taxes, insurance, management, repairs, utilities and any other lines.
- Optionally add the property value and number of units for cap rate and per-unit figures.
- Press Calculate NOI to see the result and a downloadable NOI statement.
How NOI is calculated
- Gross potential rent: all units rented for the full year at market or scheduled rent.
- Effective gross income (EGI) = gross potential rent − vacancy & credit loss + other income.
- Operating expenses = taxes + insurance + management + repairs + utilities + other running costs.
- NOI = EGI − operating expenses.
- Operating expense ratio = operating expenses ÷ EGI.
Example: $120,000 of rent with 5% vacancy ($6,000) and $4,800 of other income gives an EGI of $118,800. Expenses of $14,000 tax, $5,200 insurance, 8% management ($9,504), $9,000 repairs, $6,500 utilities, $2,400 landscaping and $1,800 of other costs total $48,404. NOI is $70,396 and the expense ratio is 40.7%.
Included in NOI or not?
| Item | In NOI? | Why |
|---|---|---|
| Property taxes, insurance | Yes | Recurring cost of owning and operating |
| Management, repairs, utilities | Yes | Day-to-day operating costs |
| Mortgage principal & interest | No | Financing, not operations (see DSCR) |
| Depreciation | No | Non-cash tax item |
| Income taxes | No | Depend on the owner, not the property |
| Capital improvements (new roof) | Usually no | Often budgeted as reserves below NOI |
Frequently asked questions
What is the NOI formula?
NOI = effective gross income − operating expenses, where effective gross income = gross scheduled rent − vacancy and credit loss + other income. NOI is measured before loan payments and income taxes.
What expenses are included in NOI?
Recurring costs of running the property: property taxes, insurance, management, repairs and maintenance, owner-paid utilities, HOA fees, landscaping, cleaning, pest control and accounting. Mortgage principal and interest, depreciation, income tax and major capital improvements are excluded.
Why are mortgage payments not part of NOI?
NOI measures how the property itself performs, independent of how it is financed. That makes it possible to compare properties and to calculate the cap rate and DSCR. Cash flow after debt service is NOI minus loan payments.
What is the operating expense ratio?
It is total operating expenses divided by effective gross income. A ratio of 35% means 35 cents of every dollar collected goes to running costs and 65 cents is NOI. Typical ratios vary by property type, age and who pays utilities.
What vacancy rate should I use?
Use the property's own history or local market vacancy data. Many investors use 5% to 10% for underwriting even when a property is currently full, to account for turnover and unpaid rent.
How is NOI used to value a property?
Value = NOI ÷ cap rate. A property with $70,000 of NOI in a market where similar buildings trade at a 6% cap rate is worth roughly $70,000 ÷ 0.06 ≈ $1.17 million.
Are all the tools on FreeToolCabin tested for quality and accuracy?
Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.
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