Net Operating Income
Learn about net operating income (NOI) in Canadian real estate — what it is, how it’s calculated, and why it matters for investors and lenders.
August 08, 2025
What is Net Operating Income?
Net operating income (NOI) is the total income generated by a property after operating expenses are deducted but before taxes and financing costs.
Why Net Operating Income Matters in Real Estate
In Canadian real estate investing, NOI is a fundamental measure of a property's profitability and is used in valuation and lending decisions.
Key points:
- Calculated as Gross Operating Income - Operating Expenses
- Excludes mortgage payments and capital expenditures
- Used to determine capitalization rates and property value
Understanding NOI helps investors evaluate performance and lenders assess loan eligibility.
Example of Net Operating Income in Action
The apartment building’s net operating income increased after reducing utility costs and raising rents.
Key Takeaways
- Measures income after operating expenses
- Excludes taxes, mortgage, and capital costs
- Central to property valuation and investment analysis
- Impacts lending and financing decisions
- Indicates property cash flow performance
The 365-395 W Broadway site (yellow)is just a block away from Broadway-City Hall Station (blue). / Perkins&Will, Bonnis Properties
A ground-level rendering of the tower proposed for 365-395 W Broadway in Vancouver. / Perkins&Will, Bonnis Properties 
A ground-level rendering of the tower proposed for 365-395 W Broadway in Vancouver. / Perkins&Will, Bonnis Properties
Renderings of the tower proposed for 365-395 W Broadway in Vancouver. / Perkins&Will, Bonnis Properties
The 1485 Davie Street property in Vancouver. / Avison Young
A rendering of the 21-storey Davie & Nicola project that was planned for 1485 Davie Street. / WT Leung Architects 
An overview of the 2024 design (left) and 2025 design (right) for the Bristol project. / SvN Architects & Planners, Bosa Properties
The phasing plan for the Bristol master-planned project. / SvN Architects & Planners, Bosa Properties
Renderings of the Bristol 
Renderings of Tower Three, which will be delivered in Phase One. / SvN Architects & Planners, Bosa Properties 
PacificWest Conference 2024/Dylaina Gollub Photography
PacificWest Conference 2024/Dylaina Gollub Photography
PacificWest Conference 2024/Dylaina Gollub Photography
PacificWest Conference 2024/Dylaina Gollub Photography
First-quarter new home sales over the past five years/BILD, GOHBA, Zonda Urban via the Missing Middle Institute
According to CMHC’s chart above, anything short of that keeps price-to-income ratios “near pandemic-era highs,” the agency warns, stressing that “increasing housing supply is the key to restoring affordability.”
