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This is the One Metric Every New Real Estate Investor Must Know

Philip Michael
1 min read
This is the One Metric Every New Real Estate Investor Must Know

In recent posts, I’ve broken down the importance of knowing your numbers—especially if you’re a new investor just starting out. And yes, while this may be the most important metric for young landlords to master, your net operating income (NOI) is your bread and butter.

Related: 5 of Your Most Burning Questions About Cap Rate, NOI & More—Answered

Whether you’re looking at a new deal or managing an existing one, your NOI’s your bottom line. It’s your indicator of asset value. It’s what lets you know, ultimately, whether you have a good deal on your hands or not.

Here’s a 68-second breakdown of NOI and why it matters.

Related: Am I Missing Something, or Is Real Estate Investing Really Not That Hard?

Hopefully now you have a better understanding of NOI and why it’s so important for investors to understand. But if you have any outstanding questions, ask them in the comments below.

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Do you have anything else to add about the importance of understanding your NOI?

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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.