NOI (Net Operating Income)

NOI is a property’s revenue minus its operating expenses, before debt service, income taxes, depreciation, and capital expenditures. It is the income a property produces from operations, which is what a lender underwrites against.

Formula

NOI = Effective Gross Income - Operating Expenses

Effective gross income starts from the rent roll: gross potential rent, less vacancy and credit loss, plus other income such as parking or reimbursements. Operating expenses include taxes, insurance, utilities, management, and repairs, but not debt service or capital items.

Why it matters

NOI feeds almost every CRE metric. It is the numerator in DSCR and cap rate and the basis for debt yield. Small differences in how you treat reserves or non-recurring items move all three, so consistency matters.

How vishwa.ai calculates NOI

vishwa.ai extracts the rent roll and operating statement, including scanned and photographed versions, normalizes the line items to your chart, and computes NOI with each figure linked back to the source line. Underwriting stays consistent across property types and analysts.

See also: cap rate, DSCR, debt yield.