Net Operating Income CalculatorFree online financial calculator — instant results, no sign-up
Subtract vacancy and operating expenses from gross rental income, excluding debt service.
Estimates only, based on the inputs and assumptions shown. This is not financial, investment, tax, or legal advice. Prices, rates and local rules may change; crypto scenarios do not predict returns. Confirm important decisions with a qualified professional.
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About the Net Operating Income Calculator
The Net Operating Income Calculator estimates a rental property's annual operating income by deducting a vacancy allowance and operating expenses from scheduled rental income, while adding other annual income. It reports effective gross income and net operating income before mortgage payments or other debt service. Use it to assess property-level operating performance rather than cash flow after financing.
- Annual scheduled rent ($)
- The total rent in dollars the property would generate over a full year at full occupancy, before any vacancy deduction.
- Vacancy allowance (%)
- The percentage of annual scheduled rent expected to be lost to vacancy.
- Other annual income ($)
- Annual property income in dollars from sources other than scheduled rent, such as parking, laundry, or storage fees.
- Annual operating expenses ($)
- The annual dollar cost of operating the property, including property taxes, insurance, maintenance, management, and owner-paid utilities, but excluding debt service, depreciation, income taxes, and capital improvements.
Formula and method
V = R × (p / 100); EGI = R − V + O; NOI = EGI − E = R × (1 − p / 100) + O − E.
- RAnnual scheduled rent in dollars.
- pVacancy allowance expressed as a percentage, entered as 5 for 5%.
- VAnnual vacancy deduction in dollars.
- OOther annual income in dollars.
- EGIEffective gross income in dollars per year, after the rent vacancy deduction and including other income.
- EAnnual operating expenses in dollars.
- NOINet operating income in dollars per year, before debt service.
The calculator converts the vacancy percentage to a decimal and multiplies it by scheduled rent. It subtracts that vacancy deduction from scheduled rent, adds other annual income to obtain effective gross income, then subtracts annual operating expenses to obtain net operating income. With the default inputs, the vacancy deduction is $48,000 × 5% = $2,400; effective gross income is $48,000 − $2,400 + $1,200 = $46,800.00; and net operating income is $46,800 − $16,000 = $30,800.00.
Worked example
These are the calculator's starting values and the results it actually produces for them.
Inputs
- Annual scheduled rent48000 $
- Vacancy allowance5 %
- Other annual income1200 $
- Annual operating expenses16000 $
Results
- Effective gross income$46,800.00
- Net operating income$30,800.00
How to use the Net Operating Income Calculator
- 1Enter annual scheduled rent before vacancy losses; the default is $48,000.
- 2Enter the vacancy allowance as a percentage of scheduled rent; the default is 5%.
- 3Enter expected other annual property income; the default is $1,200.
- 4Enter annual operating expenses excluding debt service and other nonoperating costs; the default is $16,000.
- 5Review the effective gross income and net operating income outputs, using the same annual period for all inputs.
Reading your result
Effective gross income shows annual revenue after the vacancy deduction and after adding other income; with the defaults, this row is $46,800.00. Net operating income shows the amount remaining after annual operating expenses; with the defaults, this row is $30,800.00. A positive NOI means operating revenue exceeds operating expenses, while a negative NOI indicates an operating shortfall. NOI is not take-home profit or cash flow after mortgage payments, capital spending, and income taxes.
Limitations
The vacancy allowance applies only to scheduled rent, not to other annual income, so other income should already reflect expected collections. The calculator uses annual totals and does not model monthly vacancies, rent changes, collection timing, or expense fluctuations. Its accuracy depends on realistic income and expense estimates. Debt service, depreciation, income taxes, and capital improvements are excluded; replacement-reserve treatment can vary across underwriting conventions, so use a consistent expense definition when comparing properties.
Common questions
Should I include mortgage payments in annual operating expenses?+
No. Mortgage principal and interest are debt service and are excluded from NOI. Subtract debt service separately from NOI when evaluating cash flow after financing.
Does the 5% vacancy allowance reduce the $1,200 of other annual income?+
No. It reduces only the $48,000 of scheduled rent by $2,400. The calculator then adds the full $1,200 of other income, producing effective gross income of $46,800.00.
Should repairs and a major property renovation both be included in operating expenses?+
Routine repairs and maintenance generally belong in operating expenses. Major renovations and capital replacements are generally excluded from NOI and should be budgeted separately.
Why is the default $30,800.00 NOI not my annual rental profit?+
The $30,800.00 is what remains from $46,800.00 of effective gross income after $16,000 of operating expenses. It does not deduct mortgage payments, capital spending, or income taxes, so it is not the amount you can necessarily retain.
Does the calculator save my information?+
Calculations run in your browser. While signed in, inputs and results are automatically recorded in account history; saving a result creates a separate saved record.
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Results are estimates for informational purposes and are not financial, medical or legal advice.