Shafiq Hirani CCIMReal Estate Advisor, REMAX Distinctive · Real Estate Advisor at RE/MAX Distinctive Commercial | Washington, DC | Your Guide To Profitable Real Estate Ventures

Unlock Property NOI: Your Ultimate Income Calculation Guide #shorts

7 May 2026 · 1 min

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In this concise instructional video, Shafiq Hirani CCIM explains what Net Operating Income (NOI) represents and how to calculate it for real‑estate properties. He clarifies that NOI is not the same as a bank balance or taxable income; it is the property’s cash‑flow after operating costs, presented in the format lenders and buyers expect. The calculation starts with gross rents at full occupancy, then sequentially subtracts vacancy loss, normalized operating expenses, a management fee (even for self‑managed assets), and a reserve for capital replacements. The remaining amount is the NOI.

Chapters

NOI is not your bank balance. It's not what shows up on your tax return. It's the income the property produces after operating expenses, calculated the way lenders and buyers expect to see it. Here is how it works. You start with the gross rents, everything the property collects at full occupancy, then subtract vacancy. then subtract normalized operating expense, then subtract the management fee— and this is important, even if you self-manage the building— and then you subtract the reserve for capital replacement. What survives all these deductions is your NOI.