What is encompassed in the term "Net Operating Income" (NOI)?

Net Operating Income (NOI) is a key metric used in real estate to assess the profitability of an income-generating property. It specifically represents the revenue produced from the property after deducting all operating expenses, which include costs such as property management fees, maintenance, repairs, property taxes, and utilities.

Focusing solely on the income generated by the property, NOI provides a clear picture of the property’s financial performance without the influence of financing costs, capital expenditures, or non-operating income and expenses. This makes it a valuable measure for investors and analysts as it reflects the operational efficiency of the property itself.

Other options describe aspects of real estate finance or property evaluation, but they do not accurately represent the definition of NOI. For example, capital expenditures are not included in NOI calculation, and financing costs and mortgage repayments similarly lie outside the scope of what NOI addresses. Additionally, tax obligations and depreciation are not relevant to determining NOI, which is purely focused on operational income.