Noi Calculator

How to Use the NOI (Net Operating Income) Calculator

Step 1: Gather Your Information

Before using the calculator, ensure you have all the necessary financial information about your property. This includes annual income figures, expense estimates, and relevant financial percentages. Prepare details such as gross rental income, other income sources, vacancy rate, and various property expenses.

Step 2: Input Gross and Additional Income

• Gross Rental Income (Annual): Input the total annual rental income from the property. Ensure to enter a non-negative number as it’s a required field.
• Other Income (Annual): Enter the total amount from other income sources like parking and laundry. This too is a required field and should be a non-negative number.

Step 3: Set the Vacancy Rate

• Vacancy Rate (%): Enter the anticipated percentage of vacancy for the year. This value should be between 0 and 100, representing the percentage of time the property remains unoccupied.

Step 4: Input Property Expenses

• Property Taxes (Annual): Provide the annual tax amount for the property. It is a required input and must be zero or a positive value.
• Insurance (Annual): State the annual insurance costs for the property, ensuring a non-negative entry.
• Utilities (Annual): Fill in the estimated annual cost for utilities. This should also be a non-negative value.
• Maintenance & Repairs (Annual): Specify the estimated yearly expense for maintenance and repairs. It should be a positive value or zero.

Step 5: Include Property Management Details

• Property Management (%): If applicable, include the percentage fee for property management services. The value should be between 0 and 100.

Step 6: Calculate Results

Once all the input fields are filled out, the calculator will compute key financial metrics including:

• Effective Gross Income: Calculated as the sum of gross rental and other incomes, adjusted by the vacancy rate.
• Property Management Fee: The fee is determined as a percentage of the effective gross income.
• Total Operating Expenses: Calculate by summing up all operating expenses including the management fee.
• Net Operating Income (NOI): Derived by subtracting total operating expenses from the effective gross income.
• Operating Expense Ratio: This percentage is the ratio of total operating expenses to the effective gross income.

Step 7: Review Financial Insights

Evaluate the results to gain insights into your property’s financial performance. Compare the net operating income against past data or industry benchmarks to assess profitability.

This step-by-step guide ensures that you efficiently use the NOI Calculator to understand and leverage your property’s income and expenses effectively.