Net Operating Income
Abbreviation: NOI
Plain-English definition
Property revenue less property operating expenses, before items such as financing costs, depreciation, and corporate overhead.
Why it matters
NOI evaluates property operations, not the complete earnings available to a REIT's shareholders.
Example
A hypothetical property with $1 million revenue and $400,000 operating expenses produces $600,000 NOI before financing and other excluded costs.
How income investors use it
Use NOI to understand property performance. Do not substitute it automatically for the company's dividend-source earnings measure.
Fly High perspective
Fly High uses the earnings measure the company identifies as the source of its dividend and keeps that measure consistent across the coverage calculation.
This material is general education, not individualized investment, tax, or legal advice.