Include PMI in NOI calculation?

[Marque San Juan]

Newb question here:

In the case of using less than 20% down, do you include PMI in your calculations for NOI? My research is leading me towards excluding it since NOI is void of the mortgage expenses to calculate cap rates, but I just want to be sure.

Thanks

[Christopher Phillips]

@Marque San Juan

Okay.

Cap rates are for commercial properties. 5+ units or retail spaces.

1-4 family properties look at cash flow and cash on cash returns.

On a side note, NOI doesn't include debt service or reserves. NOI is about looking at operating income less operating expenses, so debt service doesn't come into play.