Why it matters
NOI is where a lot of real-estate analysis starts getting serious. Rent is the headline. NOI is closer to the truth. If the property cannot produce durable NOI, the cap rate, DSCR, value estimate, and loan conversation all get shaky fast.
PropLurk take: The trap is calling rent minus mortgage the deal. That is not analysis. That is skipping the part where the property gets expensive.
- Annual rent: $30,000
- Vacancy allowance: $1,500
- Operating expenses: $10,000
Result: $30,000 - $1,500 - $10,000 = $18,500 NOI
Usually include
- Property taxes
- Insurance
- Repairs and maintenance
- Management
- Vacancy
- Owner-paid utilities
- HOA dues
Do not mix in
- Principal and interest
- Income taxes
- Depreciation
- Major renovations
- Owner-specific tax strategy
Common ways investors mess this up
- Putting the mortgage inside NOI
- Using a perfect-occupancy rent number
- Forgetting tax reassessment after purchase
- Treating a one-time rehab like a normal operating expense
How PropLurk uses it
In PropLurk, NOI feeds the rental, commercial, BRRRR, cap-rate, and DSCR logic so the deal record keeps the operating story separate from the financing story.
This guide is educational and does not provide investment, lending, tax, legal, or appraisal advice. Verify the specific property, lender, and local rules before making decisions.
Run NOI inside a complete rental analysis.
PropLurk keeps the definition, formula, assumptions, offer, and decision record connected so the number does not get lost in another spreadsheet.