NOI Calculator (Net Operating Income)
Enter rent, other income, vacancy and expenses to get effective gross income and annual net operating income instantly. No signup — the numbers update as you type.
Same conventions as the full DealQuanta engine — computed from the numbers you enter, not market data. Not financial advice.
Run the full free analysis — Score, cash flow, all metrics →The NOI formula
Effective gross income (EGI) is gross scheduled rent plus other income (parking, laundry, storage) minus the vacancy allowance. Operating expenses cover everything it takes to run the property — taxes, insurance, management, maintenance, CapEx reserves, HOA, utilities — but never the mortgage payment. Conventions here match the full DealQuanta engine: the vacancy allowance and percentage expenses are taken on gross scheduled rent, not on other income.
Worked example
A property rents for $2,100/month with no other income, a 5% vacancy allowance, 8% combined management/maintenance/CapEx, and $4,200/year of fixed expenses (tax + insurance):
- Gross scheduled rent: $2,100 × 12 = $25,200
- Vacancy loss: $25,200 × 5% = $1,260 → EGI $23,940
- Operating expenses: $4,200 + ($25,200 × 8%) = $6,216
- NOI: $23,940 − $6,216 = $17,724
These are the calculator's default inputs — trace each line in the results panel above.
Why NOI is the number everything else builds on
Divide NOI by the purchase price and you have the cap rate. Divide it by the annual loan payment and you have the DSCR. Subtract the debt service and you have cash flow — the input to cash-on-cash return. Get NOI wrong (usually by underestimating expenses or skipping the vacancy allowance) and every downstream metric is wrong with it. The step-by-step process is in how to analyze a rental property.
FAQ
- Does NOI include the mortgage payment?
- No — never. NOI is defined before debt service so it describes the property, not the financing. That's exactly what makes it useful: cap rate, DSCR and property valuation all build on NOI precisely because it's the same number for every buyer.
- Is vacancy an operating expense?
- No. Vacancy is a deduction from income: gross scheduled rent minus the vacancy allowance (plus other income) gives effective gross income, and operating expenses come out after that. Counting vacancy inside expenses too would double-count it — a common spreadsheet mistake.
- What operating expenses should I include?
- Property tax, insurance, management, maintenance, CapEx reserves, HOA dues, utilities you pay as the owner, and similar recurring costs. Percentage-based items (management, maintenance, CapEx) are conventionally taken on gross scheduled rent, which is how this calculator and the full DealQuanta engine compute them.
- What is the 50% rule and how does it relate to NOI?
- The 50% rule is a rough screen saying operating expenses often consume about half of rental income over the long run, leaving roughly half as NOI before the mortgage. It's a sanity check for your expense assumptions, not a substitute for itemizing them — self-managed newer properties can run leaner, older ones heavier.
One metric never decides a deal
The full free calculator runs this metric alongside cash flow, cap rate, cash-on-cash, DSCR and an A–F score — no signup. DealQuanta Pro adds the 10-year pro forma with IRR, side-by-side comparison and client-ready PDF reports.