Lesson 12: Net Operating Income: What is it and why is it important?
In this video, I'm gonna explain what net operating income is and why it's important. So, net operating income is all of the revenue that's remaining after paying the operating expenses. Now, note I did not say anything about debt, So the calculation is effective gross income, less your operating expenses. And that equals your net operating income. So NOI net operating income is the basis for determining the value of the property, let me show you this calculation. So to get to the value of the property, you take the net operating income and you divide it by the market cap rate.
We'll get more into the market cap rates in another video, but hopefully this was helpful. If so, please like, subscribe, or follow. Thanks so much.
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