Enter the number of units under management and adjust your operating expenses.
Average monthly rent per unit:
Vacancy Rate %:
Operating Expenses
Taxes %:
Salaries & Personnel %:
Management Fees %:
Repairs & Maintenance %:
Insurance %:
Utilities %:
Marketing %:
Administrative %:
Contract Services %:
Leasing Automation:
| Platform Fees:
$0.00 |
Total NOI Savings:
$0.00 |
| Leasing Automation ROI:
0% |
Expected Profit:
$ 1,200,000
Net Operating Income:
$1,110,177.60
NOI Percentage:
53.20%
Loss Due to Vacancy:
$0.00
Operating Expenses
| Taxes:
$0.00 |
Salaries & Personnel:
$0.00 |
| Management Fees:
$0.00 |
Repairs & Maintenance:
$0.00 |
| Insurance:
$0.00 |
Utilities:
$0.00 |
| Marketing:
$0.00 |
Administrative:
$0.00 |
| Contract Services:
$0.00 |
Calculating a property’s Net Operating Income (NOI) is essential for assessing its financial performance and overall profitability. NOI represents the income generated from a property after deducting all operating expenses, excluding financing costs. This metric is a key indicator of a property’s ability to generate cash flow and sustain operations. Accurate NOI calculations allow property owners and investors to evaluate the property’s efficiency, compare it to similar assets, and make informed decisions about pricing, financing, or potential improvements. By understanding NOI and overall profitability, property managers can identify areas to optimize expenses, maximize income, and enhance the long-term value of the investment.
Here’s a brief explanation of each of the multi-family operating expenses:
1. Taxes
Includes property taxes paid to local government authorities based on the property’s assessed value. It’s a significant recurring cost for property owners and impacts overall profitability.
2. Salaries & Personnel
This covers the wages, benefits, and payroll taxes for employees directly involved in property management, such as on-site managers, leasing agents, maintenance staff, and administrative personnel.
3. Management Fees
Fees paid to a property management company for overseeing day-to-day operations. This typically includes tasks such as leasing, tenant relations, and overseeing maintenance. The fee is usually a percentage of the gross rental income.
4. Repairs & Maintenance
Costs for maintaining the property and repairing wear-and-tear issues, such as plumbing, HVAC systems, electrical problems, and any necessary fixes to common areas or individual units. These are often ongoing, routine expenses.
5. Insurance
Premiums for property insurance that cover risks like fire, theft, vandalism, and liability. Insurance is essential for mitigating financial losses due to unforeseen events.
6. Utilities
Expenses for utilities, including water, sewer, gas, electricity, and trash removal. Some of these may be paid by the property owner for common areas or all units, while others might be passed on to tenants.
7. Marketing
Costs for advertising the property to attract new tenants, including online listings, signage, and any promotional campaigns. Effective marketing reduces vacancy rates and maximizes rental income.
8. Administrative
General administrative costs related to operating the property, such as office supplies, legal fees, accounting services, and lease documentation. This also includes any costs associated with managing tenant communications or compliance.
9. Contract Services
Costs for third-party services contracted to maintain or improve the property. This could include cleaning services, landscaping, pest control, security services, or specialized maintenance contractors for things like elevators or HVAC systems.
Each of these expenses plays a crucial role in managing the property efficiently and ensuring profitability. They must be carefully tracked to help optimize net operating income (NOI) and overall financial performance.
According to NAA’s Latest Income/Expense IQ data, most national apartment market indicators for 2024 highlight another tough year for the rental housing industry, as rising operating expenses outpaced rent growth.
Leasing Automation can significantly reduce operating expenses and improve the Net Operating Income (NOI) of a property by streamlining processes, reducing manual labor, and enhancing efficiency in property management. By reducing labor costs, minimizing vacancy losses, and increasing operational efficiency, Leasing Automation can have a direct positive impact on both operating expenses and a property’s overall NOI.
And if you’re not a ShowMojo customer, click the button below to schedule a demo to experience Leasing Automation and the many possibilities to improve your NOI, boost your bottom line, improve your team’s job satisfaction, and delight your prospective renters.