Real Estate Commission Calculator
Free real estate commission calculator. Estimate agent commissions, listing-buyer splits, broker fees, franchise costs, and seller net proceeds.
Net Operating Income (NOI) Calculator
Free NOI calculator for real estate. Calculate net operating income, cap rate, OpEx ratio, and GRM from rental revenue and operating expenses.
For cap rate calculation
Net Operating Income⧉
$202,200.00
Annual NOI
Monthly NOI⧉
$16,850.00
NOI per month
Cap Rate⧉
10.11%
NOI ÷ Purchase Price
OpEx Ratio⧉
29.1%
Operating expenses ÷ EGI
NOI Margin⧉
70.9%
NOI ÷ Effective Gross
GRM⧉
6.7
Gross Rent Multiplier
Revenue → NOI Flow
NOI
OpEx
Vacancy
Operating Expense Breakdown
| Expense | Annual | Monthly | % of EGI | Visual |
|---|---|---|---|---|
| Property Tax | $25,000.00 | $2,083.33 | 8.8% | |
| Management | $22,800.00 | $1,900.00 | 8.0% | |
| Maintenance | $15,000.00 | $1,250.00 | 5.3% | |
| Utilities | $12,000.00 | $1,000.00 | 4.2% | |
| Insurance | $8,000.00 | $666.67 | 2.8% | |
| Total OpEx | $82,800.00 | $6,900.00 | 29.1% |
Vacancy Impact Scenarios
| Vacancy % | Eff. Gross | OpEx | NOI | Cap Rate |
|---|---|---|---|---|
| 0% | $300,000.00 | $84,000.00 | $216,000.00 | 10.80% |
| 3% | $291,000.00 | $83,280.00 | $207,720.00 | 10.39% |
| 5% | $285,000.00 | $82,800.00 | $202,200.00 | 10.11% |
| 8% | $276,000.00 | $82,080.00 | $193,920.00 | 9.70% |
| 10% | $270,000.00 | $81,600.00 | $188,400.00 | 9.42% |
| 15% | $255,000.00 | $80,400.00 | $174,600.00 | 8.73% |
Planning notes, formulas, and examples
About the Net Operating Income (NOI) Calculator
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.
When This Page Helps
NOI is the foundation of real estate investment analysis. It gives 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.
How to Use the Inputs
- Enter the property's gross annual rental revenue.
- Set the expected vacancy rate.
- Select the property type for context.
- Enter annual property tax, insurance, and maintenance costs.
- Set the management fee percentage.
- Add annual utility costs if landlord-paid.
- Enter purchase price for cap rate calculation.
Formula used
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 RevenueExample Calculation
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%.
Tips & Best Practices
- A 1% vacancy change can shift NOI by thousands — always stress-test vacancy.
- Management fees of 8-10% are standard; self-managing saves money but costs time.
- Cap rate = NOI ÷ Price — higher cap rate means higher yield but often more risk.
- Budget 5-10% of gross revenue for maintenance/reserves.
- GRM under 15 generally indicates a stronger rental income relative to price.
NOI and Property Valuation
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.
Operating Expense Benchmarks
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.
The Vacancy Factor
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.
Sources & Methodology
Last updated:
Methodology
This worksheet starts with gross annual revenue, subtracts vacancy loss to estimate effective gross income, then subtracts the entered operating expenses to compute NOI. Management fees are calculated as a percentage of effective gross income, cap rate is computed as `NOI / purchase price`, and gross rent multiplier is computed as `purchase price / gross revenue`. The vacancy table reruns the same expense structure at different vacancy assumptions to show sensitivity.
The page is a property-income worksheet rather than an appraisal or lender underwriting engine. It does not model leasing commissions, reserves, tenant improvements, debt service, or market-by-market underwriting adjustments unless the user approximates them in the operating-expense inputs.
Sources
- Chapter 7 Valuation Analysis (U.S. Department of Housing and Urban Development) — HUD valuation guidance defining net operating income as property income after operating costs and its role in the income approach.
- Multifamily MBS Prospectus (Fannie Mae) — Reference describing underwritten net operating income, revenue, and operating-expense components in multifamily underwriting.
Frequently Asked Questions
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.
More in this topic
Residual Income Calculator
Free residual income calculator. Calculate monthly income remaining after all obligations, passive income ratio, financial freedom score, and growth projections.
Rental Commission Calculator
Free rental commission calculator. Estimate broker fees, move-in costs, and effective monthly rent for apartments and commercial leases.