Noi calculator
Free noi calculator: enter effective gross income and operating expenses to compute net operating income — for CRE investors building accurate underwriting.
Gross scheduled rent minus vacancy and credit loss
Taxes, insurance, management, maintenance, utilities — NOT debt service or capex
NOI (Effective Gross Income − Operating Expenses)
$120,000
NOI of $120,000 on an operating expense ratio of 40% (ESTIMATE — typical CRE operating expense ratios range 35–50% for stabilized multifamily; varies by asset class and market). Verify that your expense line includes property taxes, insurance, professional management, routine maintenance, and reserves for replacement.
NOI (Effective Gross Income − Operating Expenses)
$120,000
NOI of $120,000 on an operating expense ratio of 40% (ESTIMATE — typical CRE operating expense ratios range 35–50% for stabilized multifamily; varies by asset class and market). Verify that your expense line includes property taxes, insurance, professional management, routine maintenance, and reserves for replacement.
Where AI changes the answer
Net Operating Income is the foundation of CRE underwriting. Every downstream metric — cap rate, DSCR, cash-on-cash — starts here. Inflate NOI and you inflate the apparent value; compress it and you underpay. The most common source of error is not the income side — it is the operating expenses. Commonly-forgotten expense lines that AI flags in your underwriting: **Property management fee** — even self-managed properties should underwrite at 8–10% of collected rent (ESTIMATE). This reflects the true economic cost if you ever hire management or sell to an investor who will. **Reserves for replacement** — typically $150–$300 per unit per year for multifamily (ESTIMATE). Roofs, HVAC, appliances, and flooring do not last forever. Omitting reserves inflates NOI. **Vacancy and credit loss** — model at 5–10% of gross scheduled rent for stabilized assets (ESTIMATE). Brokers often use 5%; underwrite conservatively at 7–8% unless you have recent T12 data. **Landscaping, pest control, and turn costs** — line items that show up in actual financials but disappear from pro formas. **Insurance increases** — property and casualty premiums have risen sharply in coastal and high-cat markets. Use current market rates, not prior-owner actuals. Where AI changes the analysis: after you enter EGI and OpEx, the tool computes your NOI and flags the operating expense ratio. A ratio below 35% on a multifamily property is a red flag — it likely means expenses are understated. A ratio above 55% may indicate a value-add opportunity or a mismanaged asset. These ratios are ESTIMATES; validate against actual T12 statements and market comps. Related tools: use this NOI result as the input to the Cap Rate Calculator (to size value), DSCR Calculator (to test lender coverage), and Cash-on-Cash Calculator (to compute equity returns after debt).
Questions real estate teams ask
What is NOI in real estate and how is it calculated?
NOI (Net Operating Income) = Effective Gross Income − Operating Expenses. Effective Gross Income is your gross scheduled rent minus vacancy and credit loss. Operating expenses include property taxes, insurance, management fees, maintenance, and reserves — but NOT mortgage payments (principal + interest) or capital expenditures. NOI is an unlevered metric.
What operating expenses are excluded from NOI?
Two categories are always excluded from NOI: (1) Debt service — principal and interest on any loans. NOI is calculated before financing costs. (2) Capital expenditures (capex) — major improvements like roof replacements, HVAC systems, or full unit renovations. These are below-the-line items. Only recurring operating expenses go into the NOI calculation.
What is a typical operating expense ratio for multifamily?
Stabilized multifamily properties typically run operating expense ratios of 35–50% of effective gross income (ESTIMATE). Below 35% is a red flag — it likely means expenses are understated (missing management fees, reserves, or insurance). Above 55% may indicate a value-add opportunity or mismanagement. Always validate against the property's actual T12 operating statements, not seller pro formas.
How does NOI connect to cap rate, DSCR, and cash-on-cash?
NOI is the common input to the three most important CRE return metrics. Cap Rate = NOI / Value (unlevered yield for asset pricing). DSCR = NOI / Annual Debt Service (lender coverage test). Cash-on-Cash = (NOI − Debt Service) / Cash Invested (equity return after leverage). Improving NOI — through rent growth or expense cuts — lifts all three metrics simultaneously, which is why accurate NOI modeling is the highest-leverage underwriting skill.
More free CRE tools
- Deal X-Ray | Free AI Underwriting Analyst for Multifamily
Drop any multifamily OM into your Claude. It extracts the deal, rebuilds the math on conservative assumptions, surfaces the red flags a broker buried, and hands back a verdict in three minutes. Free. Your OMs never leave your Claude.
- Cap Rate Calculator for CRE Investors
Free cap rate calculator: enter NOI and property value to get your capitalization rate in seconds — built for CRE investors sizing up acquisition targets.
- DSCR Calculator for CRE Investors
Free dscr calculator: enter NOI and annual debt service to check your debt coverage ratio — built for CRE investors sizing lender-ready acquisitions.