Valuation
NOI (Net Operating Income)
A concise definition for the California Real Estate Exam study guide.
Definition
NOI = Effective Gross Income − Operating Expenses. Calculated BEFORE debt service and income taxes. NOI ≠ cash flow. Cash flow = NOI − Debt Service.
Why it matters on the California real estate exam
Know the definition, recognize how the term appears in a fact pattern, and compare it with related concepts before choosing an answer.
Study this topic in context
Read the related chapter for the surrounding concepts, examples, and exam tips.
Chapter 6: Valuation & Appraisal →