How to Figure NOI

How to calculate Net Operating Income (NOI) for your Real Estate Investment Property

When investing in real estate, one thing you need to know is how to figure you Net Operating Income (NOI) as it is use with Cap Rate to determine the value of a property

Here is an easy way to figure your NOI

• 1.Determine the Gross Operating Income (GOI) of the property
• Gross Potential Income – Vacancy & Credit Loss = Gross Operating Income

• 2.Determine the operating expenses of the property. Such as expenses for management fee, legal & accounting, insurance, maintenance, supplies, taxes, utilities you may need to carry & so on.
• 3.
• 4.Subtract the operating expenses from the Gross Operating income to arrive at the Net Operating Income.
• Example a property with a gross operating income of $50,000.00 & operating expenses of $30,000, your net operating income would be $20,000.00. ($50,000-30,000=20,000).