Oct '24 • Crunch The Numbers
NOI & Cap rate calculation
Take Away
Step 3: Calculate
Net Operating income (NOI) = Annual Gross Income - Annual Expenses
Expense Ratio = (Annual Expenses)/(Annual Gross Income)
Alternatively, with 95% vacancy & 45% expense ratio
NOI = [ Sum of Unit*(Monthly Rent) for each Unit ] * 12 months * 0.95 * (1-0.45) + Annual Net Income from other sources like coin laundry, parking, covered parking, storage etc
Quick, Easy, Simple Calculation:
Assuming no additional income
NOI = [ Sum of Unit*(Monthly Rent) for each Unit ] * 6.27
Eg: With purchase price for 6 plex unit as $500000 and avg rent of $1000/ month
NOI = 6*1000*6.27 = $37,620
Cap Rate = NOI*100/(Purchase Price) = 37620*100/500000 = 7.524
Simple Cap Rate Calculator
1
0 comments
NOI & Cap rate calculation
skool.com/commercial-real-estate-101
Teaching people just like you how to build wealth with multi-family and other type of commercial real estate.
Leaderboard (30-day)
1
+74
2
+64
3
+41
4
+22
5
+21
Powered by