Net operating income (NOI) is gross income minus operating expenses, before debt service and income taxes.
NOI is the starting point for valuing income property, and it is the number used in cap rate and debt service coverage calculations. It includes rent and other income minus operating expenses such as taxes, insurance, and maintenance, but it excludes mortgage payments, depreciation, and income taxes. In a NNN lease the tenant pays most expenses, so NOI is close to base rent. Always verify the figure against the lease rather than the seller's pro forma.