Property Management
A commercial property's 'net operating income' (NOI) is calculated as:
AA. Gross rent minus mortgage payment
BB. Effective gross income minus operating expenses (excluding debt service)✓ Correct
CC. Gross income minus all expenses including mortgage
DD. Total rent revenue minus vacancy only
Explanation
NOI = Effective Gross Income − Operating Expenses. Operating expenses include taxes, insurance, maintenance, utilities, and management fees, but NOT debt service (mortgage payments).
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