Net Operating Income Calculator
Estimate annual real-estate NOI from rentable area, rental rate, occupancy, other income, and property-level operating expenses.
Property income
Total rentable area. Use a nonnegative U.S.-style number.
Annual rent per square foot at full occupancy.
Parking, laundry, storage, or other annual property income.
Expected occupied share, from 0% through 100%.
Operating expenses breakdown
Annual property-level real estate tax expense.
Annual third-party or internal property-management cost.
Annual property insurance attributable to operations.
Recurring upkeep required to keep the property operating.
Recurring repair costs, distinct from major capital improvements.
Other recurring annual costs needed to operate the property.
Operating expense breakdown
See each annual operating-cost category and its share of total operating expenses.
| Expense category | Annual amount | Share of expenses |
|---|
Where do operating expenses go?
The donut compares positive annual expense categories. To keep the chart readable, the four largest categories are shown individually and any remaining positive categories are grouped as Other.
Calculation details
The table follows the same canonical values used by the result cards and Excel workbook.
| Step | Calculation | Annual amount |
|---|
How to use this net operating income calculator
What this calculator does
This calculator estimates annual net operating income for an income-producing property. It first converts rentable area and an annual rental rate per square foot into Full rental, adds Other income to obtain Potential gross income, reduces rental income for vacancy through the Occupancy rate, totals six property-level operating expense categories, and subtracts those expenses from Effective gross income. The result is Net operating income (NOI). An SEC-filed REIT disclosure, for example, defines NOI as rental and other revenues less property operating expenses; see the SEC-filed NOI definition and reconciliation. This calculator is an operating-performance estimate, not a property valuation, tax return, mortgage approval, or personalized investment recommendation.
When to use it
Use it to review a rental property's operating performance, compare a property's income and recurring expenses across different assumptions, test the impact of occupancy changes, or create a consistent NOI worksheet before a deeper valuation or lending analysis. It is also useful for checking whether an expense budget is large relative to effective income. Because organizations can define NOI somewhat differently, match the inputs to the definition used in your specific analysis.
How to calculate
The calculator opens with a complete demonstration property and a validated example Excel workbook ready to download. To replace the example with your own scenario:
- Enter the property's Area in square feet and its annual Rental per area in dollars per square foot per year.
- Enter annual Other income, then set the Occupancy rate between 0% and 100%. Results update immediately.
- Replace the six operating-cost inputs: Property tax, Property management fees, Insurance, Maintenance, Repairs, and Other operating expenses.
- Read the NOI and supporting intermediate results, then review the expense table, expense-composition chart, and calculation table for the same current scenario.
- Select Download Excel to create a fresh workbook from the current validated inputs. Reset clears the demonstration and all data fields; after Reset, Excel export is disabled until a complete valid state is entered again.
Input guide
Area is required, measured in square feet, and must be zero or greater; for example, 1,500. A larger area raises Full rental when the rental rate is unchanged. Do not enter acres or square meters without converting them first. Rental per area is required annual rent in $/sq ft/year, such as 300; increasing it raises Full rental and therefore potential income. Other income is required annual non-rent property income, such as $2,000 from parking; it is added after Full rental and is not reduced by the occupancy factor in this model. Occupancy rate is required from 0% to 100%; 85% means 15% of Full rental is treated as vacancy loss. Do not enter 0.85 when you mean 85%.
All six operating-expense fields are required annual dollar amounts and must be nonnegative. In the opening example, Property tax is $20,000, Property management fees are $14,000, Insurance is $19,500, Maintenance is $18,000, Repairs are $24,500, and Other operating expenses are $17,000. Increasing any one of these lowers NOI dollar for dollar. Use recurring property-level operating costs consistently; major capital improvements, financing costs, depreciation, and owner income taxes may be handled separately depending on the NOI definition being used. For U.S. residential rental tax context, IRS Publication 527 on rental income and expenses explains tax reporting categories, which are related to but not identical to this NOI model.
Output guide
Full rental is Area × Rental per area and represents rent at 100% occupancy. Potential gross income adds Other income. Vacancy loss equals Full rental × (1 – Occupancy rate); it is zero at 100% occupancy and equals all Full rental at 0% occupancy. Effective gross income is Potential gross income minus Vacancy loss. Total operating expenses is the exact sum of the six expense inputs. Net operating income (NOI) is Effective gross income minus Total operating expenses; it can be negative when operating costs exceed effective income. The expense table reports each category's annual dollars and share of total expenses. The donut visual represents the same positive expense values, with smaller categories aggregated only when needed for readability. The calculation table shows each intermediate amount used to reach NOI.
Worked example
The startup example uses 1,500 sq ft at $300/sq ft/year, $2,000 of other income, and 85% occupancy. Full rental is 1,500 × $300 = $450,000. Potential gross income is $450,000 + $2,000 = $452,000. Vacancy loss is $450,000 × 15% = $67,500, so effective gross income is $452,000 – $67,500 = $384,500. The six operating expenses sum to $20,000 + $14,000 + $19,500 + $18,000 + $24,500 + $17,000 = $113,000. Therefore, NOI is $384,500 – $113,000 = $271,500 per year, matching the first-open result and workbook checkpoints.
How the NOI model works
Full rental = Area × Rental per area
Potential gross income = Full rental + Other income
Vacancy loss = Full rental × (1 – Occupancy rate)
Effective gross income = Potential gross income – Vacancy loss
NOI = Effective gross income – Total operating expenses
The model separates physical rental capacity, vacancy, ancillary income, and recurring operating costs. That makes assumption changes easier to diagnose: occupancy affects vacancy loss, rent and area affect Full rental, other income adds directly to gross income, and each operating expense changes NOI dollar for dollar. The operating expense breakdown table is especially useful when one cost category begins to dominate the budget.
NOI is not universally identical across every owner or disclosure. Public real-estate companies may define property-level NOI with slightly different inclusions or exclusions, so comparability depends on using a consistent period, income categories, vacancy treatment, and expense classification across properties or scenarios.
Common interpretation mistakes
- Using monthly rent in a field labeled annual $/sq ft/year inflates or understates Full rental.
- Entering 0.85 instead of 85 for Occupancy rate makes the property appear almost entirely vacant.
- Mixing capital improvements or financing payments into operating expenses changes the meaning of NOI.
- Omitting recurring costs can make NOI look stronger without changing the property's underlying economics.
- Comparing NOI figures calculated under different definitions, time periods, or occupancy assumptions can produce misleading conclusions.
For U.S. tax purposes, the IRS distinguishes repairs, operating expenses, depreciation, and other rental-property items; IRS Topic 414 on rental income and expenses summarizes several of those categories. Tax classifications do not automatically determine an analyst's NOI definition, but they are useful for understanding why expense classification deserves care.