Net operating income calculator

Net Operating Income Calculator | NOI Calculator for Real Estate

NOI Calculator: Evaluate Real Estate Profitability

Net Operating Income is the foundation of every commercial real estate valuation — it isolates how the property itself performs by stripping out financing, depreciation, and taxes. Use this calculator to compute NOI from your rent roll and operating expenses, then plug in a market cap rate to back into property value. The cap rate ranges and metric comparison tables below help you interpret the result like a professional underwriter.

Quick NOI Estimator

Enter annual figures. Vacancy is applied to gross rent only; “Other Income” (parking, laundry, fees) is assumed to flow through. The result updates as you type.

Income

Operating Expenses

Enter a market cap rate to back into estimated property value: Value = NOI / Cap Rate.

Effective Gross Income $0
Total Op. Expenses $0
OpEx Ratio —
Net Operating Income: $0 Enter income and expenses to compute NOI

I. Typical Cap Rate Ranges by Property Type

Cap rates are inversely related to price — lower cap = higher purchase price per dollar of NOI, usually for safer / more in-demand assets. These ranges reflect typical 2026 U.S. primary-market deals; secondary markets trade ~50–150 bps higher.

Property Type Typical Cap Rate Typical OpEx Ratio Notes
Class A Multifamily (urban) 4.5% – 5.5% 35% – 45% Most institutional-friendly; tight cap-rate spread
Class B / C Multifamily 5.5% – 7.5% 40% – 50% Higher OpEx; classic value-add opportunity
Single-Family Rental (SFR) 6.0% – 9.0% 40% – 55% OpEx ratio higher per door than multifamily
Industrial / Logistics 5.0% – 7.0% 15% – 25% Lowest OpEx (NNN leases) — strong post-2020 demand
Retail (NNN, single-tenant) 5.5% – 7.5% 10% – 20% Tenant pays most expenses; credit of tenant matters
Office (Class A, stabilized) 6.5% – 9.0% 35% – 50% Repricing post-pandemic; vacancy risk elevated
Self-Storage 5.5% – 7.0% 25% – 35% Recession-resilient; high operating leverage
Hospitality / Hotel 8.0% – 11.0% 60% – 75% Volatile NOI; treated as operating business

II. NOI vs Other Real Estate Metrics

NOI is the engine, but it isn’t the whole picture. Stack it against these complementary metrics to pressure-test a deal before you write a check.

Metric Formula What It Tells You Key Caveat
NOI EGI − Op. Expenses Property’s annual operating profit Excludes financing & capex — not free cash flow
Cap Rate NOI / Property Value Unleveraged annual yield Static snapshot; doesn’t capture rent growth
Cash-on-Cash Return Annual Cash Flow / Cash Invested Yield on actual equity after debt service Sensitive to leverage and interest rate
DSCR NOI / Annual Debt Service Lender’s primary loan-sizing metric Most lenders require 1.20×–1.35×
GRM Property Value / Gross Rent Quick valuation gut-check Ignores expenses entirely — only useful for comps

Expert Tips for Accurate NOI Analysis

  • Include Every Operating Expense: Property tax, insurance, repairs, management, utilities, advertising, HOA, landscaping. Missing line items routinely overstate NOI by 10–20% — and overstated NOI flows directly into overstated value at cap rate.
  • Exclude Financing & Depreciation: NOI is a property-level number, not an investor-level one. Mortgage payments, depreciation, and income taxes vary by buyer — leaving them out makes NOI a clean apples-to-apples valuation input.
  • Use Market Rent, Not Existing Leases: If existing tenants are 15% below market, use market rent for valuation purposes (with a leasing-up vacancy assumption). For lender underwriting, use in-place rent. Be explicit about which version you’re computing.
  • Apply a Realistic Vacancy Rate: 5%–10% for stable markets, higher for new construction or value-add. A pro-forma at 100% occupancy is a red flag — every market has natural turnover and some credit loss.
  • Separate CapEx from OpEx: Roof replacement, HVAC, parking lot resurfacing — these are capital improvements, not operating expenses. Reserve for them separately (often 5–10% of EGI) but don’t let them suppress NOI in your underwriting.
  • Triangulate Value with Cap Rate: Once you have NOI, divide by 2–3 plausible market cap rates to get a value range. If your asking price implies a cap rate well below the market range, you’re overpaying — regardless of how attractive the absolute NOI looks.

Methodology: NOI is computed as NOI = (Gross Rent × (1 − Vacancy Rate) + Other Income) − Σ Operating Expenses. The OpEx ratio shown is Total OpEx / Effective Gross Income. If a market cap rate is supplied, implied property value is NOI / Cap Rate. Cap rate ranges are illustrative for U.S. primary markets in 2026 and depend heavily on submarket, tenant quality, and lease structure. This calculator does not capture capex reserves, leasing commissions, free rent, or financing — for full underwriting, build a multi-year pro forma.

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