Building NOI
Model income, vacancy, reimbursements, and expenses before relying on returns.
Purpose
NOI is the operating foundation for valuation, DCF, debt, portfolio, and reporting.
When to use it
Rent roll or expenses are missing.
A cap rate or valuation output is unavailable.
A report readiness warning calls out NOI.
Inputs needed
Rent roll or income estimate
Vacancy assumptions
Expense categories
Reimbursement structure when relevant
How to read the output
Modeled NOI is stronger than screening NOI.
Expense ratio and vacancy assumptions should be checked for property type fit.
Unavailable NOI means most advanced outputs are not supportable.
Common mistakes
Using gross rent as NOI.
Ignoring vacancy and credit loss.
Treating default expense ratios as verified expenses.
Next steps
Valuation
Capital Structure
DCF
Professional note
NOI quality is usually more important than adding another advanced module.