NOI CalculatorNet operating income for rental and commercial property, line by line, with value, DSCR and benchmarks
Build a real operating statement: rent, other income, vacancy and every expense, with your own lines added. You’ll see NOI, your expense ratio and margin, what the NOI makes the property worth at today’s cap rates, whether a lender will cover the loan, and how your costs compare with 2025 apartment industry data.
By Manzoor Ahmad · 13+ years of web development & SEO experienceUpdated October 20, 2026 with NAA, Trepp and CBRE data
$0 a month
Your rent dollar vs. the apartment industry
How each $1 of income is spent before the mortgage, compared with the National Apartment Association’s 2025 “Dollar of Rent” breakdown.
What your NOI is worth
Investors value income property by dividing NOI by the market cap rate. Small changes in NOI move the price a lot.
| Cap rate | Property value | Value per unit |
|---|
The margin squeeze: next 5 years
In 2025, apartment expenses grew 3.7% while revenue grew 2.8%. When costs outrun rents, NOI grows more slowly than income.
What is net operating income (NOI)?
Net operating income (NOI) is the income a property produces after operating expenses and before mortgage payments, depreciation and income taxes. It measures how profitable the property is, regardless of how it’s financed or who owns it.
NOI = (Gross potential rent + Other income − Vacancy & credit loss) − Operating expenses
Because NOI ignores financing, it’s the number behind cap rates, property valuations, DSCR loan approvals and most commercial real estate comparisons. If you’re still estimating rent, our rental property calculator builds NOI and cash flow for a single deal.
Included in NOI
- Rent collected
- Parking & storage
- Laundry & vending
- Pet & late fees
- Expense reimbursements
- Property tax
- Insurance
- Repairs & maintenance
- Utilities you pay
- Property management
- Payroll
- Replacement reserves*
Not in NOI
- Mortgage principal
- Mortgage interest
- Depreciation
- Income tax
- Capital improvements
- Tenant improvements
- Leasing commissions
- Owner’s personal costs
*Lenders and appraisers usually deduct a replacement reserve, often $250–$300 per unit a year for apartments, even if sellers leave it out. Include it to match how your property will be underwritten.
How to calculate NOI: a 10-unit example
These are the calculator’s default numbers, a 10-unit building renting at the 2025 national average of $1,545 a unit.
- Gross potential rent10 units × $1,545 × 12 months$185,400
- Add other incomeLaundry, parking and fees at $450 a month+$5,400
- Subtract vacancy and credit loss5% vacancy + 1% bad debt on rent−$11,124
- Effective gross income (EGI)What the property actually collects$179,676
- Subtract operating expensesTax, insurance, management, repairs, utilities, admin, reserves−$65,677
- Net operating incomeA 63% NOI margin and 36.6% expense ratio$113,999
At a 6.6% cap rate, that NOI supports a value of about $1.73 million. With $91,018 of annual mortgage payments, the DSCR is 1.25, right at the minimum most lenders want. Check the financing side in detail with the DSCR calculator.
How much should operating expenses be?
The answer depends heavily on property type and who pays which bills. These are the latest industry figures to sanity-check your statement.
| Benchmark | Figure | Source & note |
|---|---|---|
| Apartment operating expenses | $8,213 per unit / year | NAA 2025 survey, ~1.7 million apartments; up 4.6% from 2024 |
| Apartment revenue | $1,545 per unit / month | NAA 2025, up 2.7% from 2024 |
| Property tax share | 10¢ per rent dollar | NAA 2025 Dollar of Rent |
| Payroll share | 7¢ per rent dollar | Mainly larger communities with on-site staff |
| Other operating costs | 27¢ per rent dollar | Insurance, utilities, upkeep and management combined |
| Implied NOI margin | About 55% | What’s left before 43¢ of debt service and 11¢ owner profit |
| 2025 NOI growth | +1.8% | Trepp median; expenses +3.7%, revenue +2.8% |
| All-property cap rate | ≈6.6% | CBRE H1 2026 Cap Rate Survey |
Small rentals without staff often run a 30%–40% expense ratio, while large apartment communities with payroll commonly land around 40%–50%. Commercial buildings on triple-net (NNN) leases can show very low expense ratios because tenants reimburse taxes, insurance and maintenance. Choose “Commercial (NNN lease)” in the calculator to add a reimbursements line.
NOI vs. cash flow vs. gross income vs. EBITDA
Rent + other incomeBefore vacancy or any costs. Used for the gross rent multiplier and gross rental yield.
EGI − operating expensesProperty-level profit before financing. Drives cap rate and value.
NOI − debt service − capexWhat actually reaches the owner. Drives cash-on-cash return.
Earnings before interest, taxes, D&AA company-level measure. For a single property it’s close to NOI, but it can include non-property income and costs.
How NOI determines property value
Commercial and multifamily property is priced on income: Value = NOI ÷ cap rate. At a 6.6% cap rate, every extra $1 of annual NOI adds about $15.15 of value. Raising NOI by $100 a month adds roughly $18,200 to what the building is worth. That’s why investors focus on small expense cuts and fee income: the impact is multiplied when the property is sold or refinanced. Work backwards from a price or forward to a value with our cap rate calculator.
How to increase NOI
Renew at market rates and price units on turnover. A measured increase is often worth more than the risk of a vacancy; test it with the rent increase calculator.
Paid parking, storage, pet rent, package lockers and laundry add to income with little extra cost.
Faster turns, better screening and renewal incentives often beat higher rents.
Ratio utility billing (RUBS) or submetering can move water and sewer costs to residents where legal.
Property tax is often the biggest single expense. If the assessment is high, an appeal can cut it; estimate the bill with the property tax calculator.
Shop insurance, landscaping, trash and maintenance contracts every year or two.
NOI mistakes that inflate a deal
| Mistake | Why it matters |
|---|---|
| Subtracting the mortgage | NOI is before debt. Deducting the loan understates NOI and breaks every cap rate comparison. |
| Zero vacancy | Lenders typically underwrite at least 5% vacancy even if the building is full today. |
| No management fee | Self-managing owners still need to include a market fee, because the next owner or lender will. |
| Using the seller’s pro forma | Projected rents and trimmed expenses can overstate NOI. Ask for the trailing 12 months (T-12). |
| Ignoring tax reassessment | Many counties reassess at the sale price, so next year’s tax bill may be much higher. |
| Treating capex as an expense | A new roof is a capital improvement, not an operating expense. Budget a reserve instead. |
Calculators that build on NOI
Find every investing and property tool in our property and real estate calculators hub.
Net operating income questions
How do you calculate net operating income?
Add up gross potential rent and other income, subtract vacancy and credit loss to get effective gross income, then subtract all operating expenses such as taxes, insurance, repairs, utilities and management. Don’t subtract mortgage payments, depreciation or income taxes.
Does NOI include the mortgage payment?
No. NOI is calculated before debt service. Subtract the mortgage from NOI to get cash flow before taxes.
What is a good NOI margin?
For apartments, an NOI margin of roughly 50%–60% of income is typical; 2025 industry data implies about 55%. Small rentals without payroll often run higher, and NNN commercial properties can exceed 90% because tenants pay most expenses.
What is a good operating expense ratio?
Commonly 35%–50% for residential rentals. Below 30% may mean expenses are missing; above 55% suggests high costs or below-market rents. Compare with similar properties in the same market.
Is property tax included in NOI?
Yes. Property tax is an operating expense and is subtracted to arrive at NOI. It’s often the largest single expense, about 10 cents of every rent dollar for apartments in 2025.
Are capital expenditures included in NOI?
Major capital improvements like a new roof are not operating expenses, so they’re excluded. Many lenders and appraisers do deduct an annual replacement reserve, often $250–$300 per apartment unit.
How does NOI affect property value?
Value equals NOI divided by the cap rate. At a 6.6% cap rate, each $1 of NOI is worth about $15.15, so a $10,000 increase in NOI adds roughly $151,500 of value.
What is the difference between NOI and cash flow?
NOI is income after operating expenses. Cash flow is NOI minus debt service and capital spending, the money that actually reaches the owner.
What NOI do lenders use for a DSCR loan?
Lenders typically use their own underwritten NOI: actual or market rent, at least 5% vacancy, a management fee even if you self-manage, and replacement reserves. Most want NOI to be at least 1.20–1.25 times the annual mortgage payment.
What is a T-12 in real estate?
A trailing-12-month operating statement showing actual income and expenses for the last 12 months. It’s the most reliable basis for NOI when buying a property.
Can NOI be negative?
Yes, if operating expenses exceed effective gross income, which happens with heavy vacancy, below-market rents or during a major renovation. A negative NOI means the property can’t support any debt from its own income.
Is this NOI calculator free and private?
Yes. It’s free, needs no sign-up and runs entirely in your browser. Nothing you enter is sent to DexoCalc or stored.
Manzoor Ahmad
13+ years of web development & SEO experience · Founder, DexoCalc
Manzoor builds and maintains every DexoCalc calculator, including the full property and investing libraries. This NOI calculator follows standard income-property underwriting: income less vacancy and credit loss, then operating expenses including reserves. It benchmarks your statement against the National Apartment Association’s 2025 data and values it with current cap rates.
Sources
- CRE Daily — NAA: owners keep just 11 cents of every rent dollar in 2025 (Oct 2026)
- National Apartment Association — Survey of Operating Income & Expenses
- CRE Daily — Multifamily NOI growth slowed in 2025 (Trepp data, Aug 2026)
- CRE Daily — CBRE H1 2026 Cap Rate Survey
- IRS Publication 527 — Residential Rental Property (deductible vs. capital expenses)
This calculator gives estimates for planning and education, not appraisal, lending or tax advice. Lenders and appraisers apply their own underwriting assumptions, so verify figures with actual operating statements and local market data.