Real Estate Investing Calculators
Net operating income.
Net operating income (NOI) is the income a rental property produces after operating expenses and before the mortgage, depreciation and income tax. Enter rent, vacancy and the yearly operating costs below to get NOI, effective gross income and the operating expense ratio. Runs in your browser; nothing is sent or stored.
Your numbers
Result
Fill the form and press Calculate.
Not financial advice. This is an estimating tool built on the numbers you enter. Real estate returns depend on assumptions that can be wrong; check them with a lender, an accountant and local sources before you buy.
Worked example
Rent $2,400 a month is $28,800.00 a year. A 5% vacancy loss ($1,440.00) leaves effective gross income of $27,360.00. Operating expenses are tax $3,600 + insurance $1,200 + maintenance $2,000 + other $600 + 8% management ($2,188.80) = $9,588.80. NOI = $17,771.20 a year, and the expense ratio is 35.05%.
How it works
Gross potential income = (scheduled rent + other income) x 12. Effective gross income (EGI) = gross potential income - vacancy loss. NOI = EGI - operating expenses. Operating expense ratio = operating expenses / EGI. Mortgage principal and interest, depreciation and income tax are excluded from NOI.
Sources and basis
Corporate Finance Institute describes NOI as a standard figure for income-producing property that is not the same as net profit; its EGI page gives EGI as potential rental income plus other income less allowances for vacancy and bad debts. Wikipedia’s DSCR article defines NOI as gross revenue less operating expenses.
- NOI (Net Operating Income) (Corporate Finance Institute, published Feb 5, 2020), opened 2026-10-08.
- Effective Gross Income (EGI) - Definition, Formula, Worked Example (Corporate Finance Institute, published Mar 9, 2021), opened 2026-10-08.
- Debt service coverage ratio (Wikipedia), opened 2026-10-08.
FAQ
How do you calculate net operating income?
Add rent and other income, subtract the vacancy loss to get effective gross income, then subtract operating expenses. The worked example gives $17,771.20.
Does NOI include the mortgage?
No. NOI is before debt service, so two buyers of the same property with different loans have the same NOI.
Is depreciation included in NOI?
No. Depreciation is a tax accounting item and is left out of NOI.
What is the operating expense ratio?
Operating expenses divided by effective gross income. In the example it is 35.05%.
What is NOI used for?
It feeds the cap rate (NOI / price), debt service coverage ratio (NOI / debt payments) and a property value estimate (NOI / cap rate).