I recently watched one of the BiggerPockets webinars (totally awesome material) where the rental calculator was used. After putting in all the numbers, a report was generated and I didn't exactly understand how NOI was being calculated. Can someone assist me in understanding this, as I know it's crucial as a new investor to have a grasp on the numbers?
Annual income =
12 * (scheduled rent + other scheduled income)
Annual expenses =
12 * (fixed expenses + variable expenses, vacancy included)
Cash Flow =
Annual income - annual expenses
NOI = ?
As part of this, can someone share their thoughts on whether debt service (principal and interest payment) is considered a fixed expense? Maybe different investors look at this differently?
Thanks for any assistance you can provide ahead of time! Very helpful to have a community of folks guiding newer folks along the way!