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Rainer
154,691
Ken Jones, Commercial Real Estate
Kenneth J. Jones, Inc. - Toms River, NJ

Daniel Lloyd There is no such thing as a "net operating income formula."

The net operating income (NOI) is that amount which remains after deducting a property's operating expenses from it's effective gross income.

There's no magic to this; it's a simple addition and subtraction function.

Mar 25, 2019 02:27 PM
Rainmaker
894,690
Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

NOI is not a formula but the net operating income of a property which is the gross income minus the expenses. The net operating income is used to calculate cap rate and other metrics used in commercial and investment real estate. If you're not working in commercial or investment real estate, chances are you probably will not use it but you might so you should know what it is.

Mar 25, 2019 04:01 PM
Rainmaker
5,571,886
Barbara Todaro
RE/MAX Executive Realty - Retired - Franklin, MA
Previously Affiliated with The Todaro Team

I haven't dealt with investment properties for decades.... I'm sure you'll have some good answers here....

Mar 25, 2019 03:19 PM
Rainmaker
4,209,382
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Kenneth J. Jones has got you covered. It is a case of using the correct numbers!

Mar 25, 2019 03:17 PM
Rainmaker
4,116,781
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Never.

Mar 25, 2019 02:54 PM
Ambassador
5,408,079
Bob Crane
Woodland Management Service / Woodland Real Estate, EXP - Stevens Point, WI
Forestland Experts! 715-204-9671

We do use NOI often, accuracy depends on the accuracy of the data.

Mar 25, 2019 02:45 PM
Ambassador
4,257,353
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

NOI is used with investor clients.

Mar 25, 2019 09:41 PM
Rainmaker
1,899,324
Bob "RealMan" Timm
Ward County Notary Services - Minot, ND
Owner of Ward Co Notary Services retired RE Broker

Never Daniel Lloyd .

Mar 25, 2019 02:02 PM
Rainmaker
991,135
Doug Dawes
KW Evolution - Topsfield, MA - Georgetown, MA
Your Personal Realtor®

Occasionally when I have a small multi-unit listing. Are you thinking of CAP Rate?

Mar 26, 2019 07:34 AM
Rainmaker
3,331,180
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

Only when listing income property. I personally dont like it. Some people live by it. I like to use a ales approach to know what the building is worth. Then i like to use basic math to compare income vs expenses. I can then tell if the property will make or lose me money in the real life, not just math life

Mar 26, 2019 06:00 AM
Rainmaker
1,707,423
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

Accuracy is always an estimate not an exact science.

Mar 26, 2019 05:41 AM
Rainmaker
684,615
Peter Testa
Nationwide Homes - Danbury, CT
PETER TESTA

Comes up when we list a Multi Family. 

Mar 26, 2019 05:16 AM
Rainmaker
4,042,729
Richard Weeks
Dallas, TX
REALTOR®, Broker

Kenneth J. Jones has you convered.

Mar 26, 2019 03:34 AM
Rainmaker
960,861
Diana Zaccaro Broker Associate
Tropical Beachside brokered by eXp - Cocoa Beach, FL
"The Accidental Blogger" Cocoa Beach, Florida

Never.

Mar 25, 2019 06:01 PM
Rainmaker
6,606,395
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

What is your formula?

Mar 25, 2019 04:59 PM
Rainmaker
1,387,173
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

Never.

Mar 25, 2019 04:54 PM
Rainmaker
1,230,031
Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets
Big Block Realty 858.232.8722 - La Jolla, CA
& Host of Postcards From Success Podcast

NEVER

Mar 25, 2019 04:46 PM
Rainmaker
910,796
John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

I don't do income properties, as a rule.

Mar 25, 2019 03:46 PM
Rainmaker
5,586,517
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Daniel,

Kenneth J. Jones has your answer. A

Mar 25, 2019 03:24 PM
Rainmaker
1,596,596
Valeria Mola
SIB Realty - Miami, Sunny Isles Beach - Sunny Isles Beach, FL
305-607-0709 SIB Realty Condos for Sale and Rent

You got great answers. 

Jul 06, 2019 12:57 PM
Rainmaker
821,922
Olga Simoncelli
Veritas Prime, LLC dba Veritas Prime Real Estate - New Fairfield, CT
CONSULTANT, Real Estate Services & Risk Management

I've used that on commercial properties; it's only a guideline based on some assumptions e.g. capital rate.

Mar 28, 2019 07:16 AM
Ambassador
3,055,932
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

I wish you all the best with your real estate studies.

Mar 26, 2019 11:59 AM
Ambassador
4,579,225
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

See what Ken has to say. I've never used such a thing

Mar 26, 2019 07:55 AM