Net Operating Income (NOI) (NOI)
Direct definition
A property's income after operating expenses but before mortgage payments and taxes.
Written by the Vabasso Mortgage Editorial Team · Reviewed against agency and federal sources · Read our editorial policy for how we research and review mortgage content
Plain-English explanation
NOI = effective gross income – operating expenses (management, maintenance, insurance, property tax, utilities, etc.). It excludes debt service and income taxes.
Why it matters
NOI drives cap rate, DSCR, debt yield, and property valuation.
Where you may see it
- Rent roll
- Operating statement
- DSCR loan underwriting
- Appraisal report
A real-world example
A property with $72,000 in EGI and $18,000 in operating expenses has an NOI of $54,000.
Educational and illustrative only
A common misunderstanding
NOI isn't the same as cash flow — it's calculated before mortgage payments and debt service are subtracted.
Ask Vabasso AI
This glossary provides general educational information. Mortgage terminology, qualification methods, forms, timelines, fees, program rules, and legal meanings may vary by lender, investor, loan program, property, occupancy, state, and transaction. Definitions do not represent loan approval, legal advice, tax advice, or a commitment to lend.
- Author
- Vabasso Mortgage Editorial Team
- Reviewed by
- Vabasso Mortgage Licensed Advisory Team
- Last reviewed
- July 30, 2026