Net Operating Income
Rental Income
Rental Income: The rental income is the total funds collected from tenants as part of the leasing arrangement.
Ancillary Income
Ancillary Income: The ancillary income is the non-rental income sources of a property earned on the side, such as the proceeds earned from selling parking permits, late fee charges, and access to on-premise amenities.
What is NOI in real estate?
NOI stands for "Net Operating Income" and measures the profit potential of income-generating properties before subtracting non-operating costs.
NOI Formula
Net Operating Income (NOI) = (Rental Income + Ancillary Income) - Direct Operating Expenses
Direct Operating Expenses:
The operating expenses are incurred by a property for its day-to-day operations to continue running, such as property management fees, property taxes, property insurance, utilities, and maintenance work.