---
title: "What Is Net operating income? Landlord and Renter Glossary"
description: "Net operating income is rental income minus operating costs such as repairs, insurance, taxes and management, counted before any mortgage payments."
url: https://realpmgold.multisites.ai/glossary/net-operating-income
publisher: Real Property Management Gold
phone: +1-301-392-2172
assessment: https://realpmgold.multisites.ai/contact-us#assessment
---

Finance

# Net operating income

Net operating income is rental income minus operating costs such as repairs, insurance, taxes and management, counted before any mortgage payments.

Net operating income, or NOI, is a property's income after operating costs and before the mortgage. Start with rent and other income. Subtract costs such as repairs, insurance, property taxes, management and other running costs. Do not subtract loan payments.

As an illustration, if a rental brings in $30,000 in a year and operating costs are $6,000, NOI is $24,000. That is an example only. NOI is the top of the formula for [cap rate](https://realpmgold.multisites.ai/glossary/cap-rate), and it comes before [cash flow](https://realpmgold.multisites.ai/glossary/cash-flow), which subtracts the loan.

Because NOI leaves out financing, it lets you judge the property itself. Count a fair allowance for vacancy and repairs, not just the best year. Real Property Management Gold describes its Wealth Optimizer as "an intuitive, powerful interface that provides easy access to important metrics." See the [Wealth Optimizer](https://realpmgold.multisites.ai/wealth-optimizer) page for how owners view their numbers.

[Read nextWealth Optimizer: maximize your rental property ROI](https://realpmgold.multisites.ai/wealth-optimizer)

## Related terms

-   [Cap rate](https://realpmgold.multisites.ai/glossary/cap-rate)
-   [Cash flow](https://realpmgold.multisites.ai/glossary/cash-flow)
-   [Vacancy rate](https://realpmgold.multisites.ai/glossary/vacancy-rate)
-   [Management fee](https://realpmgold.multisites.ai/glossary/management-fee)

## Sources

1.  [Real Property Management Gold: Wealth Optimizer](https://www.realpmgold.com/wealth-optimizer)

## Ask what your home could rent for. Free.

A free rental assessment from our offices in Lexington Park and Waldorf. No cost, no contract, no pressure.

[Request a free assessment](https://realpmgold.multisites.ai/contact-us#assessment)[(301) 392-2172](tel:+13013922172)