REAL ESTATE GLOSSARY
NOI
Net Operating Income
Property revenue minus normal operating expenses, before debt service and certain non-operating items.
What does NOI mean?
Property revenue minus normal operating expenses, before debt service and certain non-operating items. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
NOI in context
A building collecting $900,000 with $350,000 in operating costs has $550,000 NOI.
Why it matters in financing
NOI can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related real estate terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.