NOI Calculator – Net Operating Income for Rental Property

An NOI calculator that finds the net operating income on a rental property from its rent, vacancy, and operating expenses. It builds the number step by step — gross income, vacancy loss, effective gross income, itemized expenses — then reports NOI monthly and annually plus the operating expense ratio. It deliberately excludes the mortgage, income tax, and depreciation. Everything runs locally in your browser.

🔒 Pure browser calculation — nothing is uploaded.

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Parking, laundry, storage, pet fees — monthly total.
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Your net operating income

Gross income (monthly)—
− Vacancy & credit loss—
Effective gross income (monthly)—
− Management—
− Maintenance—
− CapEx reserve—
− Property tax (monthly)—
− Insurance (monthly)—
− HOA dues—
Total operating expenses (monthly)—
NOI (monthly)—
NOI (annual)—
Operating expense ratio—

NOI is calculated before debt service — the mortgage, income tax, and depreciation are excluded on purpose. Divide this NOI by the property value in the cap rate calculator to get your cap rate.

How to calculate net operating income

Net operating income is the cleanest measure of how a rental property performs as a business, before any loan enters the picture: NOI = effective gross income − operating expenses. This calculator builds it from the ground up so nothing is hidden. It starts with gross income (your monthly rent plus other income like parking or laundry), subtracts a vacancy and credit-loss allowance to reach effective gross income, then itemizes each operating expense — management, maintenance, a capital-expenditure reserve, property tax, insurance, and HOA dues — and subtracts the total to land on NOI, reported both monthly and annually.

The single biggest NOI mistake is folding the mortgage into expenses. Do not. NOI is a pre-debt-service number — mortgage principal and interest are excluded entirely, and so are income tax, depreciation, and one-off capital improvements. Income tax and debt service depend on your personal situation, not the property; depreciation is a non-cash accounting entry; and a one-time capital improvement is a lump investment rather than a recurring operating cost. Keep the expense fields to ongoing operating costs only and your NOI stays comparable across deals and financing structures.

NOI matters because so much is built on top of it. Lenders divide annual NOI by the annual mortgage payment to get the debt-service coverage ratio (DSCR) — they typically want at least 1.20 to 1.25 — and appraisers and investors divide NOI by the property's value to get the capitalization rate. Because both numbers inherit any error in NOI, getting the expenses right is what makes everything downstream trustworthy. The operating expense ratio shown above (total expenses over effective gross income) is a quick gut-check: a rising ratio signals costs creeping up faster than rent.

Once you have NOI, put it to work: divide it by the property value in the cap rate calculator for the unleveraged return, fold in your mortgage and down payment with the cash-on-cash return calculator, and browse every tool in the real estate investment calculators hub.

Frequently Asked Questions

Net operating income is the income a rental property generates from operations after operating expenses but before any mortgage payment. The formula is NOI = effective gross income − operating expenses, where effective gross income is your rent and other income after a vacancy allowance. NOI measures how the property performs as an asset, independent of how you finance it, which is why it's the foundation under cap rate, property valuation, and lender debt-service tests.

Start with gross income (monthly rent plus other income), subtract a vacancy allowance to get effective gross income, then subtract operating expenses — property management, maintenance, capital reserves, property tax, insurance, and HOA dues. What's left is your monthly NOI; multiply by 12 for annual NOI. This calculator does every step live as you type, showing gross income, vacancy loss, effective gross income, each expense line, and NOI both monthly and annually.

No — this is the most common NOI mistake. Net operating income is calculated before debt service, so mortgage principal and interest are never part of it. A property has one NOI whether you pay all cash or borrow 80%, because NOI describes the asset's operations, not your loan. The mortgage only enters the picture afterward, when you subtract it from NOI to get cash flow or divide NOI by it to get the debt-service coverage ratio (DSCR).

Operating expenses are the ongoing costs of running the property: property management fees, maintenance and repairs, a capital-expenditure reserve, property tax, insurance, HOA dues, and any utilities you cover. They're the recurring costs of keeping the building rented and in good order. This calculator itemizes management, maintenance, CapEx, tax, insurance, and HOA so you can see exactly what's in the total.

NOI deliberately leaves out four things: mortgage principal and interest (debt service), income tax, depreciation, and one-off capital improvements. Debt service and income tax depend on your personal financing and tax situation, not the property; depreciation is a non-cash accounting entry; and a major capital improvement like a new roof is a one-time investment, not an operating cost. Include any of these and your NOI — and every number built on it — will be wrong.

They sound alike but sit on opposite sides of NOI. A CapEx reserve is a small monthly allowance you set aside for predictable big-ticket replacements (roof, HVAC, water heater) spread over their lifespan — most investors treat it as an operating expense, so this calculator includes it. A one-time capital improvement you actually spend in a given year is excluded from NOI because it's a lump investment, not a recurring operating cost.

NOI is the input to both. Cap rate = NOI ÷ property value × 100, so the cap rate measures the unleveraged return the property's NOI produces — run it in the cap rate calculator. Lenders use DSCR = annual NOI ÷ annual mortgage payment; a DSCR of 1.25 means NOI covers the loan 1.25 times over. Both numbers are only as accurate as the NOI underneath them, which is why getting NOI right matters.

The operating expense ratio is total operating expenses divided by effective gross income, as a percentage. It tells you what share of your collected rent gets eaten by running the property before the mortgage. Many residential rentals land somewhere around 35–50%, depending on whether the owner or tenant pays utilities and how old the building is. A rising ratio over time is an early warning that expenses are outpacing rent.

Yes. No rental stays occupied every single month — tenants turn over, units sit empty between leases, and some rent goes uncollected. Building in a vacancy percentage (5% is a common starting point; check local norms) turns optimistic gross rent into realistic effective gross income before expenses. Skipping it inflates NOI and overstates the cap rate and cash flow that depend on it.

No. This calculator is pure client-side JavaScript — your rent, vacancy, and expense figures are never uploaded, logged, or stored. It keeps working offline once the page has loaded.