CAPRATE

NOI Calculator: Net Operating Income

See what's left after vacancy and operating costs — before the mortgage — live as you type.

Instant Results

Illustrative example — replace with your records. Vacancy applies to rent plus other income.

Income Details
$
$
Operating Expenses & Vacancy
%
$
$
$
$
$
Annual Net Operating Income (NOI)
$86,750.00
Gross Potential Income
$125,000.00
Vacancy & Credit Loss
5.00% (-$6,250.00)
Effective Gross Income
$118,750.00
Total Operating Expenses
-$32,000.00
  • Property Taxes (Annual)-$12,000.00
  • Insurance (Annual)-$2,400.00
  • Maintenance & Repairs (Annual)-$6,000.00
  • Management Fees (Annual)-$9,600.00
  • Other Operating Expenses (Annual)-$2,000.00
Annual Net Operating Income (NOI)
$86,750.00
Operating Expense Ratio (OER)
26.95%
Monthly NOI
$7,229.17
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Current-input checks

Each one percentage-point increase in vacancy reduces annual NOI by $1,250.00.

Largest entered operating expense: Property Taxes (Annual) ($12,000.00, 10.11% of EGI).

What happens when vacancy or the lease structure changes?

Three illustrative cases with full annual inputs. Load one into the calculator, then replace every assumption with the property's records.

Illustrative examples only — not market averages, lending standards, or investment advice.

Stabilized multifamily

Modest vacancy and ordinary property-level expenses — a clean rehearsal of the default math.

Annual Gross Potential Rent
$120,000.00
Other Annual Income (Parking, Laundry, etc.)
$5,000.00
Vacancy & Credit Loss (%)
5.00%
Property Taxes (Annual)
$12,000.00
Insurance (Annual)
$2,400.00
Maintenance & Repairs (Annual)
$6,000.00
Management Fees (Annual)
$9,600.00
Other Operating Expenses (Annual)
$2,000.00
Gross Potential Income
$125,000.00
Vacancy & Credit Loss
$6,250.00
Effective Gross Income
$118,750.00
Total Operating Expenses
$32,000.00
Annual Net Operating Income (NOI)
$86,750.00
  • Vacancy hits the full $125,000 gross potential before any expenses come out.
  • Load it to rehearse how a rent roll and recurring expenses become annual NOI.
  • Not a market average, property class, or expected result for another multifamily deal.

High-vacancy multifamily

Same income base, but 15% vacancy plus higher maintenance and other expenses.

Annual Gross Potential Rent
$120,000.00
Other Annual Income (Parking, Laundry, etc.)
$5,000.00
Vacancy & Credit Loss (%)
15.00%
Property Taxes (Annual)
$12,000.00
Insurance (Annual)
$2,400.00
Maintenance & Repairs (Annual)
$9,000.00
Management Fees (Annual)
$9,600.00
Other Operating Expenses (Annual)
$3,000.00
Gross Potential Income
$125,000.00
Vacancy & Credit Loss
$18,750.00
Effective Gross Income
$106,250.00
Total Operating Expenses
$36,000.00
Annual Net Operating Income (NOI)
$70,250.00
  • Empty units and heavier repairs cut NOI even though potential rent never moved.
  • Load it to stress-test how occupancy and repairs change the current-input NOI.
  • Does not predict lease-up, vacancy, repairs, or returns on a real property.

NNN retail

$180,000 potential rent, 3% vacancy, and a short list of owner-paid expenses.

Annual Gross Potential Rent
$180,000.00
Other Annual Income (Parking, Laundry, etc.)
$0.00
Vacancy & Credit Loss (%)
3.00%
Property Taxes (Annual)
$0.00
Insurance (Annual)
$0.00
Maintenance & Repairs (Annual)
$2,000.00
Management Fees (Annual)
$3,600.00
Other Operating Expenses (Annual)
$1,000.00
Gross Potential Income
$180,000.00
Vacancy & Credit Loss
$5,400.00
Effective Gross Income
$174,600.00
Total Operating Expenses
$6,600.00
Annual Net Operating Income (NOI)
$168,000.00
  • When tenants pick up most operating costs, more of the effective income stays as NOI in this input set.
  • Load it to check which expenses still sit with the owner before you compare NOIs.
  • The specific lease decides expense responsibility — not a general NNN benchmark.

What NOI Actually Measures (and What It Skips)

NOI answers one question: after vacancy and the costs of running the building, what's left — before the mortgage? Cap rate, property value, and DSCR all start from this number. Trust a soft listing figure and every downstream metric tilts. This calculator does the annual arithmetic as you type. Add rent and other income, apply vacancy to that total, subtract owner-paid operating expenses. Have monthly figures? Multiply each by 12 first. It is a simplified input convention, not a lender stamp. Some properties apply vacancy by income source; appraisers and lenders may define expenses differently. Confirm against the rent roll and operating statements before you compare deals.

  • One number you can drop into cap rate, value, or DSCR
  • Vacancy and expenses shown as separate steps — not a black box
  • Easy to rebuild from a rent roll when a listing looks too clean
Read the NOI formula guideSee how NOI connects to cap rate
Professional Formula
NOI = (Gross Rent + Other Income − Vacancy) − Operating Expenses

Want the default numbers broken down?

Use the calculator defaults — or load Stabilized multifamily to put the same figures back in. Start with $120,000 rent plus $5,000 other income ($125,000 gross potential). 5% vacancy removes $6,250, leaving $118,750 effective gross income. Subtract $32,000 in operating expenses and annual NOI is $86,750 — about $7,229 a month. When the rehearsal is clear, swap every figure for the property's records.

Why shouldn't you trust the seller's NOI?

A listing NOI is often a marketing number. Rebuild it from the rent roll and trailing-twelve-month (T12) statements, then enter that rebuild here to check the arithmetic. Watch for the usual gaps: understated repairs, one-time credits, optimistic vacancy, and owner costs that look like they belong to tenants. NOI can turn negative when expenses beat effective income — that checks your inputs; it does not score property quality, management, value, or fit.

What stays in this NOI — and what gets left out?

NOI, cash flow, and valuation are related but different jobs. This page uses a simple operating-income convention — not a universal industry rule for every property.

NOI
Effective gross income minus the operating expenses you enter here — before any loan payments.
T12, in-place, stabilized, and proforma
Different time stories for the same formula: recent actuals, current leases, a stabilized run-rate, or a forward projection. This calculator runs the annual inputs you enter; it does not label which story you chose.
Cash flow and debt service
Cash flow can include mortgage principal and interest. Debt service belongs in a financing check such as DSCR — not in this NOI result.
CapEx, depreciation, income tax, and replacement reserves
Not operating-expense inputs here. Treatment varies by purpose, agreement, lender, or valuation convention — document the choice before comparing properties.

What question do you have next?

Take the same documented NOI into cap rate or value. Switch to DSCR when the question is whether the loan pays for itself.

Calculate cap rateEstimate property valueLearn the NOI workflow
Cap Rate topic cluster

Continue exploring cap rate

Six deeper reads — definitions, formulas, judgement, upstream NOI, metric comparisons, and city benchmarks.

What is Cap Rate?
Definition, what it measures, what it ignores.
Cap Rate Formula
Step-by-step calculation with worked examples.
Good Cap Rate Ranges
Benchmark ranges by asset class and risk appetite.
How to Calculate NOI
The upstream NOI breakdown every cap rate depends on.
Cap Rate vs Cash-on-Cash
When each metric mis-leads the other.
Cap Rate by City
2026 benchmarks across 20 US markets and 4 asset classes.

How to Use

  1. 1

    Enter annual income

    Start with annual gross potential rent and other income — parking, laundry, storage. Vacancy applies to their combined total here; check that treatment against the property's records.

  2. 2

    Enter recurring operating expenses

    Add annual taxes, insurance, repairs, management, and other owner-paid costs. Use the same period as the income so the math lines up.

  3. 3

    Read the NOI (and OER)

    Annual NOI, monthly NOI, and the expense ratio update as you type. OER only appears when effective gross income is positive — and it describes these inputs, not the quality of the property or its management.

Frequently Asked Questions

Why are mortgage payments excluded from NOI?
NOI is about the building's operations, not your loan. Mortgage principal and interest are debt service — put them in a cash-flow or DSCR analysis, not in these operating-expense inputs. A lender may still use a different defined convention for their file.
What is the difference between OpEx and CapEx?
OpEx keeps the lights on; CapEx replaces big pieces. Operating expenses are recurring costs of running the property. CapEx is a major or infrequent outlay — a new roof, for example. This calculator has no CapEx or reserve line; whether to reflect reserves depends on your purpose, leases, and underwriting convention.
What is the difference between T12, in-place, stabilized, and proforma NOI?
Same formula, different time story. T12 is the last twelve months of actuals. In-place mirrors current leases and occupancy. Stabilized assumes a normal vacancy and expense run-rate after lease-up. Proforma is a forward projection for underwriting or marketing. This calculator returns NOI for the annual inputs you enter — label which story you used before comparing deals.
Why shouldn't I trust a seller's stated NOI?
Marketing NOI is often optimized for the listing. Rebuild it from the rent roll and T12 statements: confirm vacancy and concessions, find understated repairs or one-time credits, and check which costs the owner still pays under the leases. Use this calculator to check that rebuild — not as a substitute for the source documents.
How does NOI impact property value?
In a simple direct-cap estimate, value ≈ NOI ÷ Cap Rate. That only holds with a supportable, stabilized NOI and a cap rate that fits the property, market, leases, and risk. It is not an appraisal or a full cash-flow analysis.
How should I use the Operating Expense Ratio (OER)?
OER is operating expenses ÷ effective gross income — when that income is positive. It describes this input set; it does not grade the property, its management, or its class. Compare it only with like-for-like records. When effective gross income is zero, OER is unavailable.

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