# Net Operating Income (NOI) Calculator Calculate a rental property Net Operating Income from gross rent, other income, vacancy loss, and a full operating expense breakdown. --- - **Canonical URL:** https://dothecalculation.com/calculators/net-operating-income-calculator - **Category:** Real Estate & Property - **Publisher:** Do The Calculation (https://dothecalculation.com) - **Cost:** Free, no account or sign-up required - **Privacy:** Runs entirely in the browser; inputs are never sent to a server - **Methodology:** https://dothecalculation.com/methodology --- ## Net Operating Income (NOI) Calculator Calculate a rental property's Net Operating Income from gross rent, other income, vacancy loss, and every real operating expense — the single number that feeds cap rate, valuation, and every downstream investment decision on this site. - Separates vacancy loss from operating expenses, unlike most quick calculators - Full expense breakdown: taxes, insurance, maintenance, utilities, management - Shows NOI margin and implied cap rate if you enter a property value ## Quick Answer — What Is Net Operating Income? NOI is **Effective Gross Income minus Total Operating Expenses**, where Effective Gross Income is gross rent and other income after subtracting vacancy loss. It is deliberately calculated *before* debt service (mortgage payments), income taxes, depreciation, and capital expenditures — those are ownership-structure and financing decisions, not property-operating performance, and mixing them in is the most common NOI mistake. **The formula in one line:** NOI = (Gross rent + Other income − Vacancy loss) − (Property tax + Insurance + Maintenance + Utilities + Other opex + Management fee). **Quick reference (annual NOI, $2,000/month rent, 5% vacancy, typical expense mix):** roughly **$14,500–$15,000/year** after taxes, insurance, maintenance, utilities, and an 8% management fee — meaning operating expenses consume close to **40% of effective income** on a fairly typical single-family rental. That expense ratio is worth remembering: if your own number comes in well under 30% or well over 50%, it's usually a sign an expense line is missing or overstated. NOI feeds directly into cap rate (NOI ÷ property value) and, from there, into valuation — this calculator shows an implied cap rate automatically if you enter a property value, but its main job is getting the NOI number itself right. ## How to Use This Calculator Enter monthly rent and any other recurring income (parking, storage, laundry, pet fees), your expected vacancy rate as a percentage, and each annual operating expense line: property tax, insurance, maintenance/repairs, utilities you pay (not tenant-paid), and any other recurring operating cost. Add your property management fee as a percentage of collected rent, and optionally a property value to see an implied cap rate. **Worked example:** $2,000/month rent, $100/month other income, 5% vacancy, $3,600/year property tax, $1,200/year insurance, $1,800/year maintenance, $600/year utilities, $300/year other opex, 8% management fee, on a $320,000 property. Gross potential income = ($2,000 + $100) × 12 = **$25,200**. Vacancy loss = $25,200 × 5% = **$1,260**. Effective gross income = $25,200 − $1,260 = **$23,940**. Management fee = $23,940 × 8% = **$1,915.20**. Total operating expenses = $3,600 + $1,200 + $1,800 + $600 + $300 + $1,915.20 = **$9,415.20**. NOI = $23,940 − $9,415.20 = **$14,524.80**, a 60.7% NOI margin, and an implied cap rate of $14,524.80 ÷ $320,000 = **4.54%**. **A second example, larger property:** $3,500/month rent, no other income, 7.3% vacancy (the 2026 US national average rental vacancy rate), $6,000/year property tax, $2,000/year insurance, $2,400/year maintenance, 10% management fee, on a $500,000 property. Gross potential income = **$42,000**. Vacancy loss = $42,000 × 7.3% = **$3,066**. Effective gross income = **$38,934**. Management fee = $38,934 × 10% = **$3,893.40**. Total operating expenses = $6,000 + $2,000 + $2,400 + $3,893.40 = **$14,293.40**. NOI = $38,934 − $14,293.40 = **$24,640.60**, a 63.3% margin, implied cap rate of $24,640.60 ÷ $500,000 = **4.93%**. Once you have a reliable NOI, plug it into the [cap rate & valuation calculator](/calculators/cap-rate-market-calculator) to see what that NOI implies about property value at different target cap rates, or the [rental property ROI calculator](/calculators/rental-property-roi-calculator) to layer financing on top and see cash-on-cash return. For a full worked walkthrough of how NOI, cap rate, and cash-on-cash return fit together in a real short-term rental underwrite, see the [Airbnb ROI guide](/blog/property/airbnb-roi-guide). ## The Formula This Calculator Uses **Gross Potential Income** = (Monthly rent + Other monthly income) × 12. **Vacancy Loss** = Gross Potential Income × Vacancy rate %. **Effective Gross Income (EGI)** = Gross Potential Income − Vacancy Loss. **Management Fee** = EGI × Management fee % (calculated on *collected*, not potential, rent — this is standard property-management billing practice and a detail generic calculators sometimes get wrong). **Total Operating Expenses** = Property tax + Insurance + Maintenance + Utilities + Other opex + Management fee. **Net Operating Income** = EGI − Total Operating Expenses. **NOI margin %** = NOI ÷ EGI × 100. **Operating expense ratio** = Total Operating Expenses ÷ EGI × 100 — these two always sum to 100% and are the fastest way to sanity-check whether your expense assumptions are realistic for the property type. **Implied cap rate** (if a property value is entered) = NOI ÷ Property value × 100. ## What Belongs in Operating Expenses — and What Doesn't This is where most DIY NOI calculations go wrong, and it's worth being explicit. Operating expenses are the *recurring* costs of running the property day to day: property tax, insurance, routine maintenance and repairs, utilities the owner pays, property management fees, and smaller recurring line items like pest control or landscaping. **What does not belong in NOI, ever:** mortgage principal and interest (debt service — NOI is calculated before financing, which is exactly what makes it comparable across an all-cash buyer and a heavily leveraged one), income tax, depreciation (a non-cash accounting entry, not an operating cost), and capital expenditures like a new roof, HVAC replacement, or major renovation. Capex is a separate, lumpy, infrequent cost category — folding a $12,000 roof replacement into one year's 'maintenance' line would understate that year's true NOI and overstate every other year's. This distinction is exactly why NOI, not cash flow, is the standard metric lenders and appraisers use for property valuation — it isolates the property's own earning power from how any particular owner chose to finance it. ## Vacancy Rate: Use a Real Number, Not Zero It's tempting to model 0% vacancy — the rent roll looks perfect on day one. But the 2026 US national rental vacancy rate sits at **7.3%**, the highest since 2017, and even well-managed properties see vacancy between tenant turnovers, unit prep time, and marketing periods. Using 0% vacancy is the single most common way a pro forma NOI overstates what a property will actually deliver. A reasonable vacancy assumption depends heavily on local market conditions and property class — stabilized properties in strong rental markets can run 3-5%, while markets with high supply or seasonal demand can run well above the national average. If you don't have a reliable local figure, the 7.3% national average is a more honest starting point than assuming full occupancy. Property management fees compound this: this calculator applies the management fee to *effective* (post-vacancy) rent, not potential rent, because that's what a real property manager actually bills against — a detail worth checking if you're comparing this output against a broker's or lender's own NOI worksheet. ## What This Calculator Doesn't Account For This model uses steady-state annual figures. It doesn't model rent escalation over a multi-year hold, seasonal expense timing (like a large winter heating bill concentrated in a few months), or one-time capital expenditures — those belong in a separate capex reserve calculation, not the recurring NOI figure. It also doesn't include debt service, so NOI alone doesn't tell you whether a deal cash-flows positively for a leveraged buyer — that requires layering in the actual mortgage payment, which the [rental property ROI calculator](/calculators/rental-property-roi-calculator) does, or for a monthly breakdown that also reports DSCR, the [property cash flow calculator](/calculators/property-cash-flow-calculator). And it doesn't calculate the Gross Rent Multiplier, a quicker (if cruder) screening metric — see the [Gross Rent Multiplier calculator](/calculators/gross-rent-multiplier-calculator) if you want to compare properties on price-to-rent alone before doing a full NOI workup. Finally, the implied cap rate shown here is a convenience output, not a market valuation — for a proper cap-rate-driven property value estimate using market-comparable cap rates, use the [cap rate & valuation calculator](/calculators/cap-rate-market-calculator), which is purpose-built for that direction of the calculation. ## Frequently asked questions ### Does NOI include mortgage payments? No. NOI is calculated before debt service specifically so it measures the property's own earning power independent of how it's financed. Mortgage principal and interest are subtracted later, when calculating cash flow, not NOI. ### Should I use 0% vacancy if my property is currently fully occupied? No — use a realistic vacancy assumption based on your market, even for a currently full property. The 2026 US national rental vacancy rate is 7.3%; modeling 0% is the most common way a pro forma NOI overstates real performance. ### Is a new roof or HVAC system an operating expense? No. Capital expenditures like roof replacement, HVAC replacement, or major renovations are a separate cost category from recurring operating expenses like maintenance and repairs, and including them in NOI would distort the year they occur. ### Is the management fee calculated on gross rent or collected rent? This calculator applies it to effective gross income (rent actually collected, after vacancy loss), matching how property managers typically bill — a detail that can meaningfully change the number versus applying it to gross potential rent. ### What's a normal operating expense ratio? It varies by property type and age, but somewhere in the 35-45% range of effective gross income is common for typical residential rentals with professional management. Ratios well outside that range are worth double-checking for missing or overstated expense lines. ### How is NOI different from cash flow? NOI is income minus operating expenses only. Cash flow subtracts debt service (mortgage payments) from NOI as well, so cash flow reflects a specific financing structure while NOI reflects the property's operating performance alone. ### Can I use NOI to value a property myself? You can get an implied cap rate from this calculator if you enter a value, but for an actual valuation estimate, divide NOI by a market-appropriate cap rate for your property type and location — the cap rate & valuation calculator is built specifically for that direction. ## Related concepts - **Effective Gross Income (EGI)** — Gross potential rental income minus vacancy and collection losses — the base figure operating expenses are subtracted from to reach NOI. - **Operating expense ratio** — Total operating expenses divided by effective gross income, expressed as a percentage — a quick check on whether expense assumptions are realistic. - **Capital expenditures (Capex)** — Large, infrequent property costs like roof or HVAC replacement, kept separate from recurring operating expenses in NOI calculations. ## Related guides - [Airbnb ROI Guide: How to Calculate Cap Rate, Cash Flow, and Cash-on-Cash Return](https://dothecalculation.com/blog/property/airbnb-roi-guide) — Underwrite short-term rentals like a professional. Learn how to calculate cap rate, monthly net cash flow, and occupancy-driven returns using actual vacation rental math. ## Related calculators - [Property Cash Flow Calculator (Monthly)](https://dothecalculation.com/calculators/property-cash-flow-calculator) — Calculate monthly rental property cash flow and DSCR from rent, vacancy, the full operating expense stack, and the mortgage payment. - [Rental Yield Calculator (Gross & Net)](https://dothecalculation.com/calculators/rental-yield-calculator) — Calculate gross and net rental yield from purchase price, rent, vacancy, and operating expenses to see real return, not just the headline number. - [Gross Rent Multiplier (GRM) Calculator](https://dothecalculation.com/calculators/gross-rent-multiplier-calculator) — Estimate property value and calculate the Gross Rent Multiplier from purchase price and annual rental income for quick investment screening. - [Rental Property ROI Calculator](https://dothecalculation.com/calculators/rental-property-roi-calculator) — Calculate rental property ROI with projected monthly cash flow, cap rate, cash-on-cash return, and net operating income for investment properties. - [Commercial Cap Rate & Valuation Calculator](https://dothecalculation.com/calculators/cap-rate-market-calculator) — Calculate commercial property capitalization rates and estimate implied property valuation from net operating income for investment analysis. - [Airbnb ROI Calculator](https://dothecalculation.com/calculators/airbnb-roi-calculator) — Calculate Airbnb rental ROI, including projected monthly cash flow, cap rate, and cash-on-cash return, to evaluate short-term rental profitability. --- _This calculator is for educational and planning purposes. Actual property performance depends on local market conditions, lease terms, and property-specific factors not captured in a steady-state annual model. Verify expense assumptions against actual bills, and consult a property manager or appraiser before relying on this for an investment or lending decision._ --- _Source: [Do The Calculation](https://dothecalculation.com/calculators/net-operating-income-calculator). Quote freely with attribution and a link to this page._