Monthly Archives: 4 сар 2023

However, this does not indicate an improvement to the property as a whole. Once the gross operating income is determined, it can be used to calculate net operating income. The formula to determine the cap rate is the ratio between net operating income (NOI) and the property value. On the other hand, a property with a negative NOI signifies the property is unprofitable, and thus costs more to operate the property than the amount it earns in income on behalf of the investor. However, a “good” NOI is relatively subjective and contingent on several factors, including the property type, the location, and the current state of the real estate market. The net operating income (NOI) of a rental property offers practical insights into the profitability of an investment, which has…