What is Net Operating Income?
A plain annual formula is: NOI = rental income + other property income - vacancy and credit loss - operating expenses Operating expenses can include property taxes, insurance, repairs, routine maintenance, utilities paid by the owner, management, lawn care, pest control, and HOA dues. Keep the list tied to the property. Do not subtract the mortgage, principal paydown, owner income taxes, or a wholesaler's assignment fee from NOI. Some investors also show a separate capital-expenditure reserve. State that choice when you compare two deals. The same math works monthly, but annual NOI is the normal input for cap rate. For rent research when building NOI estimates, published Fair Market Rent data by ZIP is available in the <a href='/fmr'>FMR Atlas</a>. See cap rate for the value comparison and DSCR for the lender coverage test.