Net operating income calculator.
Enter the rent, the vacancy, other income and the running costs. See the net operating income at once, and where the income goes.
Your property
Operating expenses per year
Your result
Net operating income
$480,000
Operating expenses are 18.64% of effective gross income. Effective gross income is $590,000: rent $600,000, minus $30,000 vacancy and credit loss.
Where the income goes
| Net operating income | $480,000 | 81.36% | |
|---|---|---|---|
| Property taxes | $48,000 | 8.14% | |
| Management | $23,600 | 4.00% | |
| Maintenance and repairs | $18,000 | 3.05% | |
| Insurance | $14,000 | 2.37% | |
| Utilities | $6,400 | 1.08% | |
| Other expenses | $0 | 0.00% | |
| Total operating expenses | $110,000 | 18.64% |
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One page: your inputs, the net operating income, where the income goes and the formula.
How it is computed
The income the property can really collect in a year.
What is left of that income after the costs of running the property.
The share of the collected income that running the property takes.
Terms follow Appraisal Institute usage: potential gross income, effective gross income, net operating income. Net operating income is a difference, so it is set as an equation and not as a fraction.
What counts as an operating expense.
Operating expenses are the recurring costs of running the property: property taxes, insurance, maintenance and repairs, management and utilities. Mortgage payments, income taxes, depreciation and capital improvements are not.
Why break the expenses down.
One total tells you the net operating income. The breakdown tells you which line takes the most income, so you know where to look first when the number is lower than expected.
Questions.
Is net operating income the same as profit?
Why is debt service excluded?
Where do capital expenses go?
Next in the sequence
- Cap rate calculator
Turn the income into a rate and test a price.
- Cash on cash return calculator
See the return on the cash you put in.
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