NOI Calculator
Add rent, vacancy and operating costs to see net operating income, the expense ratio and the cap rate it implies.
Free · runs in your browser · nothing is uploaded
How to use the NOI calculator
- Enter the Purchase price. The example uses $300,000, which the tool needs to show the cap rate.
- Enter the Monthly rent. The example uses $2,400.
- Enter Other income per month, such as parking. The example uses $0.
- Enter Vacancy as a percentage of rent. The example uses 5.
- Enter Property tax per year and Insurance per year. The example uses $3,600 and $1,200.
- Enter HOA, utilities and other fixed costs per month. The example uses $0.
- Set Maintenance (% of rent) and Capital expenses (% of rent). The example uses 5 and 5.
- Set Property management (% of collected rent). The example uses 8.
- Read the year-one statement from gross rent down to net operating income.
- Check the expense ratio and the cap rate shown beside the result.
Change one input at a time to see which line moves NOI most, since each line has a different effect on the result. The results update as you type. The buttons Reset to examples, Copy summary, Download CSV and Print or save as PDF restore the examples or keep the figures. The page address holds your inputs, so a link you send recreates the same result.
Change one input at a time to see which result moves. The address bar keeps your inputs, so you can bookmark or share a scenario. Reset to examples restores the example values.
What is net operating income and how do you calculate it?
NOI equals income collected minus operating expenses. Gross scheduled rent is $28,800 a year at $2,400 a month. Vacancy takes off $1,440, so income collected is $27,360. Operating expenses are $9,869, so NOI is $27,360 − $9,869 = $17,491 a year.
| Item | Year 1 |
|---|---|
| Gross scheduled rent | $28,800 |
| Vacancy loss | -$1,440 |
| Other income | $0 |
| Income collected | $27,360 |
| Property tax, insurance and fixed costs | -$4,800 |
| Maintenance and capital expenses | -$2,880 |
| Management | -$2,189 |
| Operating expenses | -$9,869 |
| Net operating income | $17,491 |
What counts as an operating expense and what does not?
Operating expenses are the costs of running the property: property tax, insurance, repairs, management, utilities you pay as owner, and HOA dues. In the example, property tax and insurance make up $4,800 a year, so they count. NOI leaves out mortgage principal and interest, income tax, depreciation and capital improvements such as a new roof. The tool treats capital expenses as a yearly set-aside, a percentage of rent, so that set-aside is inside NOI. A one-off improvement is not.
How do the percentage costs work?
Three costs are set as percentages, not dollar amounts. Maintenance and capital expenses are each 5% of gross rent: 5% × $28,800 = $1,440 each, or $2,880 together. Management is 8% of income collected: 8% × $27,360 = $2,189, rounded. When you change the rent, these costs change with it.
Is NOI per year or per month?
The tool shows NOI per year, $17,491, and per month, $1,458. The monthly figure is the yearly one divided by 12: $17,491 ÷ 12 = $1,457.58, shown as $1,458. Compare it with monthly rent or a monthly loan payment only after you check that both use the same period.
What is a good NOI percentage?
There is no fixed good number. The expense ratio shows operating expenses as a share of income collected: $9,869 ÷ $27,360 = 36.1% in the example. Use it as a check against your own records. A building with different costs, rent levels or management will show a different ratio.
How do lenders and buyers check a seller’s NOI?
A lender or buyer can rebuild NOI from the leases and expense records, and may use their own vacancy and cost assumptions. Their figure can therefore differ from the seller’s. Enter your own numbers here, then compare the result with the seller’s statement.
Frequently asked questions
How do you calculate the NOI?
Subtract operating expenses from income collected. In the example, $27,360 − $9,869 = $17,491 a year.
What is a good NOI percentage?
No fixed number is good for every property. Check the expense ratio, 36.1% in the example, against your own records for the same property and period.
How to figure out your NOI for a rental property?
Add up the rent you collect over the year, after vacancy and any other income. Then subtract property tax, insurance, repairs, management and other owner-paid costs. Leave out the mortgage payment, income tax and depreciation.
Is NOI calculated per year?
This calculator works on one year. The example shows $17,491 a year, and dividing by 12 gives $1,458 a month.
What is NOI in commercial real estate?
NOI is the income a property collects in a year, minus the costs of running it, before loan payments. This calculator follows the same steps: gross rent, less vacancy, less operating expenses, gives $17,491 in the example. It leaves out mortgage payments, depreciation, income tax and one-off improvements such as a new roof.
Does NOI include reserves?
Yes, on this page. The capital expenses line is a yearly set-aside of 5% of gross rent, or $1,440 in the example, so it reduces NOI. A one-off improvement, such as a new roof, is not part of NOI.
How is NOI used to determine property value?
Value equals NOI divided by the cap rate you would accept. In the example, $17,491 ÷ 5.83% is about $300,000, and at an 8% cap rate the same NOI is worth $218,640. Use the cap rate calculator to test other returns.
Related tools
- cap rate calculator: use it to turn NOI into a cap rate or a value.
- dscr calculator: use it to compare NOI with the loan payments.
- rental income calculator: use it for monthly cash flow after the loan.
- rental property calculator: use it for the full projection.
- gross rent multiplier calculator: a rough check that ignores expenses.
- cash on cash return calculator: use it to see the return on the cash you put in.