PASS GEORGIA
REAL ESTATE EXAM PREPGEORGIA REAL ESTATE EXAM GLOSSARY
Net operating income, or NOI, is annual effective gross income minus operating expenses, before debt service, income taxes, depreciation expense, and owner-specific financing costs.
Valuation and Market Analysis
Income valuation
Define, distinguish, apply, retrieve
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PASS GEORGIA
REAL ESTATE EXAM PREPGEORGIA REAL ESTATE EXAM
GLOSSARY TERM GUIDEBuild the complete exam definition
Learn the rule, separate it from the nearest distractor, then apply it to a Georgia fact pattern.
What does Net operating income mean?
Net operating income, or NOI, is annual effective gross income minus operating expenses, before debt service, income taxes, depreciation expense, and owner-specific financing costs.
How do you separate the nearest exam answer?
NOI is net property income from operations. Cash flow after debt service subtracts mortgage payments and reflects the owner's financing.
What changes or stays the same in Georgia?
This national calculation is unchanged in Georgia. Use the expense list in the stem and exclude capital, financing, and income-tax items unless the question defines a different measure.
A property has $120,000 effective gross income and $42,000 operating expenses. NOI is $78,000.
Subtracting principal and interest from NOI is the standard setup error.
PASS GEORGIA
REAL ESTATE EXAM PREPGEORGIA REAL ESTATE EXAM
GLOSSARY TERM GUIDERetrieve the rule under exam conditions
Answer before reading the explanation. Then explain why every distractor belongs to a different term.
A small apartment building has effective gross income of $96,000, operating expenses of $34,000, and annual mortgage payments of $40,000. What is its net operating income?
- A
$22,000
- B
$56,000
- C
$74,000
- D
$62,000
NOI is effective gross income minus operating expenses: $96,000 minus $34,000 equals $62,000. Mortgage payments are debt service, which depends on the owner's financing, so they stay out of NOI. Subtracting them too gives $22,000, which is cash flow after debt service.
Mark each box only when you can perform the skill without looking.
I can define the term in one precise sentence.
I can separate it from the closest look-alike.
I can explain the Georgia rule or confirm that the national rule applies.
I can answer the practice check and explain every option.
PASS GEORGIA
REAL ESTATE EXAM PREPGEORGIA REAL ESTATE EXAM
GLOSSARY TERM GUIDEConnect the term to the wider exam
Use these relationships to move from isolated recall to a connected exam model.
Valuation and Market Analysis complete lesson
https://www.passgeorgiarealestate.com/math/net-operating-income
Official exam administration and content-outline source.
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https://appraisalfoundation.org/pages/uspap