Property Management
In Michigan, a 'net operating income' (NOI) for a rental property is defined as:
AGross rent minus mortgage payments
BEffective gross income minus all operating expenses (excluding debt service)✓ Correct
CGross rent minus property taxes only
DNet income after all taxes and depreciation
Explanation
NOI = Effective Gross Income (gross rent less vacancies) minus all operating expenses, but before debt service (mortgage) and income taxes. It measures the property's income-producing capacity independent of financing.
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