Net Operating Income
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EXAMPLE: revenue rental income: $20,000 parking fees: $5,000 laundry machines: $1,000 total revenue: $26,000 op ex property management fee: $1,000 property taxes: $5,000 repair and maintenance: $3,000 insurance: $1,000 total op ex: $10,000 NOI = ?
NOI = $26,000 - $10,000 = $16,000
NOI Formula
NOI = Effective Gross Income (-) Operating Expenses
NOI = ?
NOI = sale price * cap rate
Net Operating Income (NOI)
The resulting amount when all operating expenses are subtracted from effective gross income
EGR TOE NOI
effective gross revenue total operating expenses net operating income
what does NOI tell you
tells property owner if renting a property is worth the expense of owning and maintaining it