Cash Flow Vs NOI: Does the mortgage count as expenses?

[Richard C.]

Hi BP members,

Can anyone please clarify the difference between cash flow and NOI? At first, I thought they both are the same thing until I started researching up on other stuff like the term Cap Rate, which confused me even more because I believe the calculations I read up on said the Cap Rate's NOI wouldn't include the mortgage expense in the equation and the cash flow/cash on cash return does include the mortgage as an expense. Yet, they both need the NOI (but its not consistent in using the mortgage as an expense?).

Bottom line, does NOI (net operating income) use the monthly or annual rental income? ...MINUS.......... the monthly or annual expenses? And are mortgages counted as expenses?

I've noticed different answers, some say income minus expenses and expenses only being: taxes, utilities, insurance, property mgnt fees, etc. Then I see some answers saying expenses are all of that above what I just listed AND mortgages included. Also are mortgages just the principal and interest? Or is it Principal, interest, taxes, insurances, all packed into what is called "Mortgages"?

Thank you for any feedback/explanation and sorry if this sounds confusing. Any help would be much appreciated!