NOI Calculator
Net operating income is the number every other rental metric is built on. Enter income and operating expenses to get NOI, plus the expense ratio that tells you whether your costs are in a normal range.
Income
Annual operating expenses
Net operating income
$0
Effective gross income
$0
Total operating expenses
$0
Expense ratio
0%
Mortgage payments are deliberately excluded. Divide NOI by the property's value in the cap rate calculator to compare properties.
What Is Net Operating Income?
Net operating income is what a rental property earns from operations after the costs of running it, and before the costs of owning it on credit. It is the foundation of cap rate, of most lender underwriting, and of commercial property valuation.
NOI = effective gross income − operating expenses
effective gross income = (gross rent + other income) − vacancy loss
What Goes In — and What Does Not
Include
- Property taxes
- Insurance
- Routine repairs and maintenance
- Property management fees
- HOA dues
- Owner-paid utilities
- Landscaping, snow removal, pest control
- Vacancy allowance
Exclude
- Mortgage principal and interest
- Capital improvements (roof, furnace, full renovation)
- Depreciation
- Your income taxes
- Loan fees and closing costs
- Leasing commissions on a purchase
The Expense Ratio Sanity Check
Operating expenses divided by effective gross income gives the operating expense ratio, and it is the fastest way to catch a bad NOI. For most small residential rentals the ratio lands somewhere between 35% and 55%, depending on who pays utilities and whether management is hired out.
A ratio under 25% usually means something is missing — most often maintenance, vacancy, or management. The old "50% rule" is a blunt version of this same check: assume half of gross rent disappears into operating costs and see whether the deal still works.
From NOI to the Numbers You Actually Spend
NOI is a starting point, not a paycheck. Two steps take you to real money:
- NOI − debt service = pre-tax cash flow. What lands in your account before taxes.
- Cash flow ÷ cash invested = cash-on-cash return. Run it in the cash-on-cash calculator.
Related Calculators
cap rate calculator · cash-on-cash return calculator · rent increase calculator · rent vs. sell calculator
Your NOI, Calculated Continuously
Kelpic records every rent payment and expense as it happens, so you are not reconstructing a year of operating costs from bank statements each time you need this number.
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