Net Operating Income ("NOI")


Revenue - Operating Expenses


Net Operating Income is used to calculate capitalization rate ("cap rate"), a fundamental quantitative valuation metric for real estate investing.


Depending on the type of real estate, revenue can include:


  • Rental revenue
  • Service fees
  • Parking revenue
  • Vending machine revenue

Operating expenses include:


  • property management
  • vacancy
  • uncollectible rent revenue
  • insurance
  • property taxes
  • maintenance

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