Free NOI calculator for real estate. Calculate net operating income, cap rate, OpEx ratio, and GRM from rental revenue and operating expenses.
The Net Operating Income (NOI) Calculator determines a property's profitability by subtracting all operating expenses from effective gross income. Enter rental revenue, vacancy rate, and operating costs to compute NOI, cap rate, operating expense ratio, and gross rent multiplier — the key metrics for evaluating any investment property.
NOI is the single most important number in commercial real estate valuation. It represents the property's income after all operating expenses but before debt service and taxes. Lenders, appraisers, and investors all use NOI to determine property value (Price = NOI ÷ Cap Rate) and loan qualification.
The vacancy impact table shows how different vacancy rates affect NOI and cap rate, while the expense breakdown visualizes which costs consume the most revenue. Use the property type selector and presets to explore typical scenarios for residential, commercial, multifamily, retail, and industrial properties. It is especially helpful when comparing a stabilized building against a value-add opportunity, because the same rent change can alter cap rate and valuation much more than the raw revenue number suggests. You can also use it to test sensitivity to management fees, taxes, or maintenance costs before making an offer. The example is deliberately straightforward, but the same structure works for larger portfolios and mixed-use assets. Check the example with realistic values before reporting.
NOI is the foundation of real estate investment analysis. This calculator provides NOI plus cap rate, GRM, and expense ratio — everything needed to evaluate a property's income performance. The vacancy scenario table stress-tests your investment at different occupancy levels. It also helps you see how small expense changes can have a much larger effect on value than they first appear.
Effective Gross Income (EGI) = Gross Revenue × (1 − Vacancy Rate) Total OpEx = Property Tax + Insurance + Maintenance + Management Fee + Utilities NOI = EGI − Total OpEx Cap Rate = NOI ÷ Purchase Price × 100 GRM = Purchase Price ÷ Gross Revenue
Result: NOI: $202,200, Cap Rate: 10.1%
EGI: $285,000 ($300K − 5% vacancy). OpEx: $82,800 (tax + ins + maint + mgmt + util). NOI: $202,200. Cap rate: $202,200 ÷ $2M = 10.1%.
The income approach values property as NOI ÷ Cap Rate. A property earning $100,000 NOI in a 5% cap rate market is worth $2 million. If you can increase NOI by $10,000 (through higher rents or lower expenses), property value increases by $200,000. This leverage makes NOI optimization extremely powerful.
Typical operating expense ratios by property type: Residential (35-45%), Multifamily (40-50%), Office (40-55%), Retail (30-45%), Industrial (25-35%). Properties significantly above these ranges may have management issues or deferred maintenance driving costs higher than market norms.
Vacancy is the silent NOI killer. A 10-unit building with one vacant unit has 10% vacancy — reducing NOI by roughly 10% after accounting for saved variable costs. Professional investors underwrite vacancy at 5-8% even in strong markets to account for turnover, leasing downtime, and tenant defaults.
Net Operating Income is a property's annual income after subtracting all operating expenses, but before debt service (mortgage), income taxes, depreciation, and capital expenditures. It measures the property's operational profitability.
Operating expenses include property taxes, insurance, repairs/maintenance, property management fees, utilities (if landlord-paid), landscaping, and other recurring costs. Debt service and capital improvements are excluded.
Cap rates vary by market, property type, and risk. Generally: 3-5% in prime urban markets, 5-8% for suburban/stable properties, 8-12% for higher-risk or value-add opportunities. A "good" cap rate depends on your risk tolerance and market.
Property Value = NOI ÷ Cap Rate. If a property generates $100,000 NOI and the market cap rate is 5%, the property is valued at $2,000,000. This is the income approach to valuation.
A high operating expense ratio (above 50-60%) means the property retains less of its revenue as NOI. This could indicate high taxes, deferred maintenance, or inefficient management.
No. NOI is calculated before debt service. This makes it comparable across properties regardless of financing. Debt service coverage ratio (DSCR) = NOI ÷ Annual Debt Service.