NOI Calculator for Commercial Real Estate: Calculate Net Operating Income

Net Operating Income (NOI) is the foundation of every commercial real estate financial metric — cap rate, DSCR, debt yield, and valuation all start with NOI. If your NOI is wrong, every number derived from it is wrong. Use the free calculator below to calculate your property’s NOI accurately.

What Is NOI?

Net Operating Income (NOI) is the annual income a property generates after operating expenses but before debt service, depreciation, and taxes. It’s the purest measure of a property’s cash-generating ability.

NOI = Gross Rental Income – Vacancy – Operating Expenses

What to Include in Operating Expenses

• Property taxes
• Insurance (property, liability, flood)
• Maintenance and repairs
• Property management fees (typically 4-10% of gross rents)
• Utilities paid by owner
• Landscaping and snow removal
• Trash removal
• Security
• Advertising and leasing costs
• General and administrative
• Capital reserves (typically $250-$500/unit/year for multifamily)

What NOT to Include in NOI

• Mortgage payments (principal and interest) — NOI is before debt service
• Depreciation — this is an accounting concept, not cash
• Income taxes — personal or corporate
• Capital expenditures — roof replacement, HVAC, major renovations (these come from reserves)
• Tenant improvements — leasing commissions may be included, but TI costs are typically capitalized

Why NOI Drives Everything

Every key commercial real estate metric flows from NOI:

• Cap Rate = NOI / Value — calculate yours
• DSCR = NOI / Annual Debt Service — check your ratio
• Debt Yield = NOI / Loan Amount — see loan sizing
• Property Value = NOI / Market Cap Rate
• Max Loan Amount = NOI / Minimum Debt Yield (or NOI / (Min DSCR x debt service constant))

How RefiLoop Helps

Accurate NOI calculation is the first step to a successful refinance. RefiLoop reviews your operating statements, normalizes your NOI the way lenders will see it, and identifies adjustments that could improve your borrowing power. Many property owners underestimate their NOI because they include expenses lenders don’t count — or miss income sources lenders will credit.

Schedule a free 15-minute review and we’ll benchmark your NOI against lender expectations.

Frequently Asked Questions

Do lenders use my actual NOI or a calculated NOI?

Lenders typically calculate their own NOI from your operating statements. They may add back certain expenses, apply market vacancy factors, and adjust for below-market rents. This “lender NOI” may differ from your accounting NOI.

Should I include reserves in NOI?

Lenders typically include a reserves allowance in their NOI calculation, even if you don’t actually fund reserves. This reduces your effective NOI and borrowing capacity.

What if I have below-market rents?

Some lenders will give partial credit for raising rents to market in their NOI calculation. This is more common with bridge lenders and debt funds than with conventional banks.