Analyzing Apartment Property Income
Calculate Net Operating Income Like an Expert
Published January 17, 2013
In commercial finance, they say cash flow is king. But what exactly is cash flow in the eyes of a financier?
The net operating income is the dollar amount used to calculate repayment ability. This is the gross income less the normal operating expenses. What are normal operating expenses? Well, many times it is in a property owner’s best interest to report as much expense as possible in order to avoid tax liability. It is a good thing to pay the least amount of taxes possible—until it comes time for financing.