Net Operating Income Defined, Calculated, and Applied
Posted in Finance on September 10, 2008
Discover the various ways net operating income gets used in real estate investing and learn how each is calculated.
Net operating income (NOI) represents a rental property’s potential income after all vacancy and operating expenses have been subtracted. As a result, because net operating income represents the investment property’s productivity, or measure of cash flow, it’s one of the most important calculations made in real estate investing.
To help plant the idea, consider net operating income in one of the following two ways, depending on whether or not a mortgage exists.
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