Instructions

Calculate the property’s annual income by combining income from rent and other income. Other income can include just about any source of reliable recurring income, such as collections from laundry machines in an apartment building or parking charges for an office building. You should also add in the expense and common area maintenance reimbursements that you may receive.

Add up all of your non-capital expenses and subtract them from the gross income to compute the net operating income, or NOI. When you calculate your expenses, leave out any non-recurring or capital items. Some of the expenses that you will want to include are property taxes, insurance, utilities, repairs and maintenance and a reasonable management fee.

Tips & Warnings

• Photo Credit windows of an office building image by GoodMood Photo from Fotolia.com

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