Net Operating Income (NOI)
Net Operating Income (NOI) is the calculated amount earned through an investment property, independent of external factors such as financing and taxes. This metric is calculated by subtracting a property’s operating expenses from its revenue during a given fiscal year.
Why it Matters
Utility costs typically make up a significant portion of a property’s overall operational expenses. Utilities are therefore an easy lever to pull to impact NOI: by lowering utility consumption and cost, you stand to substantially reduce your operating costs, thereby increasing the NOI of your property.