Property Valuation
Net operating income (NOI) is calculated as:
APotential gross income minus operating expenses
BEffective gross income minus operating expenses (excluding debt service)✓ Correct
CGross rent minus property taxes only
DTotal rent collected minus mortgage payments
Explanation
NOI = Effective Gross Income − Operating Expenses. Operating expenses include taxes, insurance, maintenance, management fees, and reserves—but NOT mortgage debt service or depreciation.
Related Arkansas Property Valuation Questions
- The income multiplier approach is most reliable for:
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