NOI Calculator
Net operating income in one pass: scheduled rent and other income, less vacancy, plus what the tenant reimburses, minus operating expenses.
Net operating income
Default inputs are a hypothetical example, not a real listing. Inputs persist in the URL for sharing. To turn this income into a yield, a supported price, or the income a price must produce, use the cap rate calculator.
How do you calculate NOI step by step?
Start with a year of scheduled rent and add any other income. Subtract a vacancy and credit-loss allowance if you underwrite one. Add back what the tenant reimburses for taxes, insurance, and common-area costs, then subtract the full operating expenses. Hypothetical example (the default inputs): $150,000 of rent, no vacancy, $24,000 of expenses of which the tenant reimburses $18,000. The landlord keeps $6,000 of cost, so NOI is $144,000.
How does NOI connect to cap rate and value?
NOI is the income those pages start from. Take it to the cap rate calculator to see the yield a price implies, the price a target cap rate supports, or the income a price must produce. Divide it by a market cap rate in the property value calculator to see what the income supports. Check the lease term behind the income with the lease date calculator, since NOI is only as durable as the lease producing it.
Why does the NOI on the flyer differ from mine?
Offering memorandums often use pro-forma rent after a future bump, leave out a management fee or reserve, or treat a landlord-paid roof as the tenant's problem. Rebuild NOI from the lease's actual rent schedule and expense clauses before you compare it to anything.
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What goes into an NOI calculation?
NOI is one year of property-level income after operating expenses: rent and other income, less vacancy, plus tenant reimbursements, minus taxes, insurance, maintenance, management, and reserves. It leaves out mortgage payments, depreciation, and income taxes.
What formula does the NOI calculator use?
Net operating income = (scheduled rent + other income) − vacancy and credit loss + tenant expense reimbursements − operating expenses. It is property-level income for one year: it ignores how the purchase is paid for, depreciation, and income taxes, which is why the same NOI drives the cap rate on any deal regardless of who buys it.
What counts as an operating expense in NOI?
Recurring costs of running the property: property taxes, insurance, common-area maintenance, repairs, utilities the landlord pays, property management, and a replacement reserve if you underwrite one. Not included: mortgage payments, depreciation, income taxes, and one-time capital projects — those sit below the NOI line.
How does a triple net lease change the NOI math?
On a true NNN or absolute-net lease the tenant pays or reimburses taxes, insurance, and maintenance, so reimbursements offset expenses and NOI lands close to base rent. On NN or modified-gross leases the landlord keeps some of those costs — often roof, structure, or parking lot — and every unreimbursed dollar comes straight off NOI. Read the lease, not the flyer, to see which column each expense belongs in.
Should I include vacancy on a single-tenant net lease?
Many buyers enter zero for an occupied single-tenant building and handle the risk through the cap rate and lease term instead. If you are underwriting a multi-tenant strip or a lease near expiry, enter a vacancy and credit-loss allowance you can defend from the market. Either way, be consistent: compare deals using the same assumption.
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