What is Net Operating Income (NOI) in Multifamily Investing?

In commercial multifamily real estate, there’s a language that is spoken when you are connecting with brokers, property managers and other investors in the profession. To avoid sounding like a novice, an investor must be fluent with the real estate terminology to be taken seriously. Let’s take a minute to breakdown one of those terms.

Net operating income (NOI) is taken as a collective of all the incomes generated from the property and deducting the operating expenses from it, excluding the capital expenditures and debt service.

• For example, a 100-unit apartment community with a total income of $1,000,000 and total operating expenses of $400,00 has a NOI of $600,00.

By learning these concepts and terms, you’re separating yourself from the novice investor looking to be more active than passive. Here’s where you can learn more multifamily investing terms.