Canadian net operating income calculator
NOI is what a property earns after costs but before the mortgage. It feeds cap rate and DSCR. Enter your rent, vacancy, and operating costs to get a clean NOI.
NOI is the base. BrickROI builds the rest on it.
NOI feeds cap rate and DSCR. BrickROI runs the whole stack on your real listing: NOI, cap rate, cash-on-cash, DSCR for your lender, the CMHC paths, and a lender-ready PDF. Paste a Canadian listing and see it in two minutes.
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How to build a clean NOI in Canada
Net operating income is a simple idea done carefully. Start with the gross rent for the year. Take off a vacancy allowance, because no rental stays full forever. That gives you the effective gross income. Then subtract every operating cost: property tax, insurance, maintenance, management, and any utilities you cover. What is left is the NOI.
The mortgage is not in there, and that is the point. NOI measures the property, not your financing. Two investors can buy the same building with different down payments and get the same NOI. Once they add their mortgages, their cash flow and DSCR will differ, but the NOI is the shared starting point.
The Canadian detail: property tax
Property tax is usually the largest single operating cost, and in Canada it runs off the municipal mill rate. Mill rates vary widely. A Hamilton property carries a higher rate than a Toronto one of the same value, so the same rent produces a lower NOI in Hamilton. Pull the real tax from the city's rate, not a flat percentage guess.
Keep these honest
- Use a vacancy allowance even for a strong rental. Many Canadian operators use 5 to 7%.
- Include management even if you self-manage. Your time is a real cost the next owner will pay.
- Keep big capital items like a roof or furnace out of regular operating expenses. They belong in a separate reserve.
NOI questions
What is net operating income?
NOI is the income a property makes after operating costs, but before the mortgage. You take the gross rent, subtract a vacancy allowance and every operating expense, and what is left is the NOI. It is the base for cap rate and a key number for lenders.
Does NOI include the mortgage?
No. NOI stops before debt. That is on purpose. It lets you compare two properties on their own merits, before financing. Once you add the mortgage, you get cash flow and DSCR.
What counts as an operating expense?
Property tax at the city mill rate, insurance, maintenance, property management, utilities you pay, and a vacancy reserve. Capital items like a new roof are usually handled separately, not in regular operating expenses.
Why does NOI matter to a Canadian lender?
Lenders use NOI to size the loan through DSCR. They divide NOI by the annual mortgage payment. A conventional lender wants that ratio near 1.20, a CMHC MLI Select path near 1.10. A clean NOI is the start of a clean lender file.