Effective gross income − Operating expenses
| Item | Included? |
|---|---|
| Rent and other income, net of vacancy | Yes |
| Property taxes, insurance, HOA | Yes |
| Management, maintenance, utilities | Yes |
| Capex reserve | Often included in investor analysis; conventions vary |
| Mortgage principal and interest | No |
| Depreciation | No |
| Income taxes | No |
Excluding financing makes NOI comparable across buyers. Two investors can own identical properties with very different loans; their NOI is the same.
Sources & Further Reading
- Internal Revenue Service — Publication 527, Residential Rental Property. www.irs.gov/publications/p527
Sources accessed for review on October 5, 2026. Laws, rates, and programs change — confirm current details at the source.
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