What NOI excludes
NOI typically excludes loan payments, income tax, depreciation and capital expenditures. Keep expense categories consistent when comparing properties.
Example
If gross rental income is 72,000, vacancy loss is 3,600 and operating expenses are 24,000, NOI is 72,000 - 3,600 - 24,000 = 44,400.
Common mistakes
Do not include mortgage payments in NOI. Also separate recurring operating expenses from one-time capital improvements when comparing properties.
Limitations
This is a simplified property metric, not investment, tax or legal advice. It does not model rent growth, reserves, financing, sale proceeds or local accounting rules.
Last reviewed: 2026-05-17