Noi calculator

Free noi calculator: enter effective gross income and operating expenses to compute net operating income — for CRE investors building accurate underwriting.

Effective Gross Income (EGI) — $

Gross scheduled rent minus vacancy and credit loss

Operating Expenses — $

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.

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NOI (Effective Gross Income − Operating Expenses)

$120,000

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.

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Free cap rate calculator: enter NOI and property value to get your capitalization rate in seconds — built for CRE investors sizing up acquisition targets.
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Free dscr calculator: enter NOI and annual debt service to check your debt coverage ratio — built for CRE investors sizing lender-ready acquisitions.
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Free cash on cash return calculator: enter annual cash flow and cash invested to compute your equity yield — for CRE investors modeling levered returns.