Net Operating Income (NOI) Calculator

How it is calculated

The tool subtracts yearly operating expenses from yearly income: NOI = income − expenses. If you also give a property value greater than zero, it shows the capitalization rate cap rate = NOI / value × 100 as a percentage. Without a value, the cap rate is left blank.

All inputs are yearly amounts in one currency; results are shown in US dollars. Negative income or expenses give no result. The tool subtracts exactly what you enter, so you decide what counts as an operating expense. Mortgage payments, depreciation and capital improvements are normally not part of NOI and should be left out of the expenses box.

Common mistakes

• Including mortgage principal and interest in expenses. NOI measures the property before financing, so this understates it.
• Entering monthly rent and monthly costs. Both fields expect yearly totals, so the cap rate comes out twelve times too low.
• Using the purchase price one time and the current market value another time when comparing cap rates, which makes properties look incomparable.
• Forgetting a vacancy allowance. If income is the full rent roll with no vacancy deducted, NOI is optimistic.