NOI Calculator
Build net operating income from gross potential income, vacancy, other income, operating expenses, and reserves.
Last updated:
How it works
Follow the underwriting path lenders use: input the deal, apply constraints, then read the result.
Enter gross potential income
Start with annual scheduled rent or gross potential income.
NOI Formula
Net operating income is the starting point for debt yield, DSCR, cap rate, and loan sizing.
Last reviewed by Commercial Real Estate Finance Reviewers on .
NOI = Gross Potential Income - Vacancy Loss + Other Income - Operating Expenses - Reserves$1,500,000 GPI - $75,000 vacancy + $50,000 other income - $475,000 expenses - $25,000 reserves = $975,000 NOI.
See This Calculator in Action
Start with a lender-style example, then adjust the calculator inputs for your deal.
Income statement build-up
Stabilized multifamily NOI
- Gross potential income: $1,500,000
- Vacancy: 5%
- Other income: $50,000
- Expenses and reserves: $500,000
This NOI can then feed debt yield, DSCR, cap rate, and max loan amount calculations.
Where NOI Flows
| Metric | Formula | Why NOI Matters |
|---|---|---|
| Debt Yield | NOI / Loan | Sets income-based loan cap |
| DSCR | NOI / Debt Service | Tests payment coverage |
| Cap Rate | NOI / Value | Supports valuation |
Worked examples
| Scenario | Calculation | Result |
|---|---|---|
| Apartment property | $1.5M GPI, 5% vacancy, $500k expenses/reserves | $925k to $1.0M NOI range depending on other income |
| Retail center | Base rent plus reimbursements minus recoverable and non-recoverable expenses | NOI before debt service |
| Loan sizing input | $900,000 NOI / 10% debt yield | $9,000,000 max loan by debt yield |
Conversion reference
| Item | Included in NOI? | Note |
|---|---|---|
| Rental income | Yes | After vacancy and credit loss |
| Operating expenses | Yes | Subtracted before NOI |
| Debt service | No | Used after NOI to calculate DSCR |
| Depreciation | No | Accounting item, not operating cash flow |
Quick facts
- NOI is the numerator for debt yield, DSCR, and cap rate.
- Debt service is not subtracted when calculating NOI.
- Replacement reserves may be included in lender underwriting NOI.
- Small NOI changes can materially change maximum loan proceeds.
Editorial Team
Commercial Real Estate Finance Reviewers
- Calculations reviewed against standard CRE lending formulas for DSCR, LTV, cap rate, and debt yield
- Methodology cross-checked against lender-style loan sizing using NOI, value, loan constant, DSCR, LTV, and debt yield
Our editorial team builds and reviews commercial real estate finance calculators around the way lenders actually size debt: property income, collateral value, annual debt service, and lender risk thresholds. Results are educational screening estimates, not loan quotes, tax advice, legal advice, or a commitment to lend.
Methodology: formulas are calculated from borrower-entered inputs using standard CRE underwriting relationships for NOI, debt yield, DSCR, LTV, cap rate, loan constant, and maximum loan proceeds.
Reviewer note: pages are reviewed for formula accuracy and updated when lender benchmarks or site methodology changes.
Disclaimer: results are educational estimates only and are not financial, legal, tax, valuation, or lending advice.
Frequently asked questions
NOI is property income after vacancy, credit loss, operating expenses, and reserves, before debt service and taxes.
No. Mortgage payment is excluded from NOI and used later to calculate DSCR.
NOI drives debt yield, DSCR, cap rate, and maximum commercial mortgage proceeds.