To calculate Net Operating Income (NOI) for your property, visit the Landlord Gurus NOI Calculator.
- Enter Monthly Rent
Input your monthly rent income.
Example: $5000 - Add Other Monthly Income
Input any additional monthly income generated by the property.
Example: $500 - Calculate Total Monthly Income
Add monthly rent and other monthly income.
Example: $5000 + $500 = $5500 - Enter Annual Operating Expenses
Input the annual costs for:- Real Estate Taxes
- Insurance
- Utilities
- Repairs and Maintenance
- Property Management
- Other Operating Expenses (if any)
Example values:
- Real Estate Taxes: $7000
- Insurance: $1000
- Utilities: $3000
- Repairs and Maintenance: $2500
- Property Management: $6600
- Other: $0
- Calculate Total Annual Operating Expenses
Add up all the annual operating expenses.
Example: $7000 + $1000 + $3000 + $2500 + $6600 = $20,100 - Calculate Net Operating Income (NOI)
Subtract the total annual operating expenses from the total annual income.
Example:
Total Annual Income: $66,000
Total Annual Expenses: $20,100
NOI: $66,000 – $20,100 = $45,900 - Calculate the Capitalization Rate (Cap Rate)
Input the property value, then calculate Cap Rate using the formula:
Cap Rate=(NOIProperty Value)×100\text{Cap Rate} = \left(\frac{\text{NOI}}{\text{Property Value}}\right) \times 100Cap Rate=(Property ValueNOI)×100
Example:
Property Value = $750,000
Cap Rate=(45,900750,000)×100=6.12%\text{Cap Rate} = \left(\frac{45,900}{750,000}\right) \times 100 = 6.12\%Cap Rate=(750,00045,900)×100=6.12% - Calculate Gross Rent Multiplier (GRM)
Use the formula:
GRM=Property ValueAnnual Rent Income\text{GRM} = \frac{\text{Property Value}}{\text{Annual Rent Income}}GRM=Annual Rent IncomeProperty Value
Example:
Annual Rent Income = $66,000
GRM=750,00066,000=11.36\text{GRM} = \frac{750,000}{66,000} = 11.36GRM=66,000750,000=11.36
Summary:
- NOI: $45,900
- Cap Rate: 6.12%
- GRM: 11.36
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