Net operating income (NOI)

Effective gross income minus operating expenses. Excludes mortgage debt service.

NOI is the property's operating profit assuming no financing. Effective gross income = gross rent collected minus vacancy. Operating expenses include property tax, insurance, management, repairs, utilities (if landlord-paid), and capital reserves — but NOT mortgage principal or interest. Lenders use NOI to size loans (DSCR = NOI / debt service).