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Results
Net Operating Income (NOI)
Effective Gross Income (EGI)
Operating Expense Ratio
Calculation Principles & Formulas
Net Operating Income (NOI) is a calculation used to analyze the profitability of income-generating real estate investments. It equals all revenue from the property, minus all reasonably necessary operating expenses.
[Formula]
NOI = (Gross Potential Income + Other Income - Vacancy Losses) - Operating Expenses
Key Metrics:
Effective Gross Income (EGI) = Gross Potential Income + Other Income - Vacancy Losses
Operating Expense Ratio = (Operating Expenses / EGI) * 100%
Note: NOI is a before-tax figure, appearing on a property's income and cash flow statement, that excludes principal and interest payments on loans, capital expenditures, depreciation, and amortization.
