Free calculator
Apartment NOI Calculator: From Gross Potential Rent to NOI per Unit
The apartment NOI calculator is a free tool that works out an apartment building's net operating income, its net operating income per unit and its expense ratio from the rent, the vacancy and the running costs.
Net operating income (NOI) is the income left after the costs of running the building, before the loan. The calculator opens on Birch Way, our 50-unit sample building, which is invented data, so the result matches the P&L on this site to the dollar. Move the sliders or type your own figures.
Buildings with 5 or more units.
The rest is vacancy.
Laundry, parking, pet rent, late fees and utility bill-backs.
Payroll, repairs, utilities, property tax, insurance, management and office costs, divided by the number of units.
Net operating income
$41,150
a month, before the loan
Per unit
$823
net operating income a month, each unit
Expense ratio
39.6%
running costs as a share of income
| Line | Amount |
|---|---|
| Rent if full | $72,500 |
| Vacancy at 94% rented | -$4,350 |
| Rent earned | $68,150 |
| Other income | $0 |
| Income | $68,150 |
| Running costs | -$27,000 |
| Net operating income | $41,150 |
Estimate a value (optional)
Type a cap rate and the tool divides a year of net operating income by it. This is arithmetic from the figures above. It is not an appraisal.
| Units | 50 |
|---|---|
| Average market rent per unit | $1,450 a month |
| Units rented | 94% |
| Other income | $0 a month |
| Running costs per unit | $540 a month |
| Rent if full | $72,500 |
|---|---|
| Vacancy at 94% rented | -$4,350 |
| Rent earned | $68,150 |
| Other income | $0 |
| Income | $68,150 |
| Running costs | -$27,000 |
| Net operating income | $41,150 |
| Net operating income per unit | $823 |
| Expense ratio | 39.6% |
Worked out on multifamilybookkeeping.com. The loan payment is not part of net operating income.
What does the apartment NOI calculator work out?
The calculator works out an apartment building's net operating income for a month and for a year. It also shows the number per unit and the expense ratio.
The 3 outputs sit side by side: net operating income, the number per unit, and the expense ratio. A switch shows them by month or by year. The inputs are in the order of the building P&L, so the result can be checked line by line against your own. What counts toward the result and what does not is in net operating income for an apartment building.
What do you enter in the apartment NOI calculator?
Units, the average market rent per unit, the percent of units rented, other income, and running costs. Running costs can be entered per unit or as 7 lines.
The inputs and their defaults, Birch Way, invented data
| Input | What it means | Default |
|---|---|---|
| Units | The number of units in the building, 5 or more | 50 |
| Average market rent per unit | What one unit rents for in a month, averaged across the building | $1,450 a month |
| Units rented | The percent of units with a paying tenant. The rest is vacancy | 94% |
| Other income | Laundry, parking, pet rent, late fees and utility bill-backs for the month | $0 a month |
| Running costs | The cost of running the building for the month, per unit or as the 7 lines below | $540 a unit a month |
| Cost line: On-site payroll | Wages and payroll costs of the staff who work at the building | $6,500 a month |
| Cost line: Repairs and unit turns | Fixing what breaks, and getting empty units ready for the next tenant | $4,800 a month |
| Cost line: Utilities | Water, sewer, gas, electricity and trash the building pays | $5,200 a month |
| Cost line: Property tax | The month's share of the yearly property tax bill | $4,600 a month |
| Cost line: Insurance | The month's share of the building's insurance premiums | $1,900 a month |
| Cost line: Management fee | What the property manager charges | $2,700 a month |
| Cost line: Office and other | Software, bank fees, legal, advertising and the rest | $1,300 a month |
Units rented is a percent, so at the default 94% of 50 units, 47 are rented and $4,350 of rent is vacancy. To see what the empty units cost in a year, use the vacancy loss calculator for apartment buildings.
The 7 cost lines are the 7 running cost groups of the building P&L, so a month's P&L can be typed straight in. What belongs in each cost line is in apartment building operating expenses.
How does the calculator work out an apartment building's net operating income?
It multiplies units by market rent, subtracts vacancy, adds other income, and subtracts running costs. The result is net operating income. The loan payment is not part of it.
In words: units times market rent is rent if full, also called gross potential rent. Rent if full times the percent rented is rent earned, and the rest is vacancy. Rent earned plus other income is income. Income minus running costs is net operating income. Net operating income divided by units is the number per unit. Running costs divided by income is the expense ratio.
The defaults worked, Birch Way, invented data
| Line | A month |
|---|---|
| Rent if full, 50 units at $1,450 | $72,500 |
| Vacancy, 6% of rent if full | -$4,350 |
| Income | $68,150 |
| Running costs, 50 units at $540 | -$27,000 |
| Net operating income | $41,150 |
Other income is $0 at the defaults, so income is the rent earned. For a year, the calculator shows 12 times the month: $493,800 of net operating income.
What is net operating income per unit for an apartment building?
Net operating income divided by the number of units. The 50-unit example earns $41,150 a month, which is $823 a unit. It lets buildings of different sizes be compared.
$41,150 divided by 50 is $823 a unit a month. For a year it is $493,800 divided by 50, or $9,876 a unit. A 12-unit building and a 50-unit building can be read side by side on this number.
What is the expense ratio of an apartment building?
Running costs divided by income. The example spends $27,000 out of $68,150 of income, which is 39.6%. A ratio that climbs means costs are growing faster than rent.
$27,000 divided by $68,150 is 39.6%. The calculator shows the ratio beside the total. Watch it month to month on your own P&L: if rent is flat and the ratio rises, a cost line has grown.
What should you leave out of an apartment building's net operating income?
Leave out the loan payment, tenant deposits, money moved to reserves, big improvements and the owner's own costs. None of them is income or a running cost of the building.
- The loan payment. Interest and principal are paid out of net operating income, below the line, so this calculator has no loan input.
- Tenant deposits. A deposit is owed back to the tenant, so it is never income.
- Money moved to reserves. It is still the building's money, set aside, so it is not a cost.
- Big improvements. A new roof adds to the building and is not a running cost of the month.
- The owner's own costs. They belong in the owner's books, not in the building's.
To set the result against the loan payment, use the multifamily DSCR calculator.
Can the apartment NOI calculator estimate a building's value?
Only if you ask. An optional step divides a year of net operating income by a cap rate you type in. It is closed by default and it is not an appraisal.
The step sits under the result, closed. Open it, type a cap rate, and the tool divides a year of net operating income by that rate. There is no default rate, because the rate is yours to choose, and the page shows no sample value. The calculator stops at the number the books produce.
Multifamily Bookkeeping produces this number from your books every month. See monthly bookkeeping for apartment buildings.