Definition: What is Net Operating Income (NOI)?
Net operating income (NOI) is the profitability formula that is mostly used in the real estate to measure the commercial property’s profit potential and financial health after the deduction of all the operating expenses.
In other words, net operating income is the amount of cash flow that property has after the payment of all the expenses.
For the evaluation of specific property investors and creditors use NOI and determine whether the investment is good or creditworthy. This calculation is not only used by the real estate other industries use this calculation also as EBIT calculation.
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