The NOI or Net Operating Income explained
NOI stands for “Net Operating Income.” It’s a way to measure how much money a property makes after all the expenses related to running the property are taken into account.
To put it simply, let’s say you own an apartment building and you rent out all the apartments to tenants. You charge them rent each month, but you also have to pay for things like property taxes, maintenance, insurance, and other expenses to keep the building running.
The NOI is the amount of money you have left over after you subtract all those expenses from the rental income you collect.
For example, if your apartment building brings in $100,000 in rent each year, but you have to pay $30,000 in property taxes, maintenance, and other expenses, then your NOI would be $70,000.
NOI is important for real estate investors because it helps them understand how much money they can expect to make from a property before taking financing and other factors into consideration.
I hope that helps!
