What does the acronym “NOI” stand for in real estate appraisal?

In real estate appraisal, the acronym "NOI" stands for Net Operating Income. This is a critical financial metric used to evaluate the profitability of income-producing properties, such as rental apartments or commercial real estate. Net Operating Income represents the revenue generated from a property after deducting all operating expenses, but before accounting for taxes and financing costs.

Understanding NOI is essential for appraisers, investors, and property managers because it provides insight into the property's ability to generate income and sustain itself financially. It typically includes income from rentals, parking, and other sources, while expenses might encompass property management fees, maintenance, utilities, and insurance. By focusing on Net Operating Income, stakeholders can assess the property's financial performance and make informed investment decisions or valuations.