Is NOI the same as gross income?

No. Gross income is the top line: all scheduled rent and other income before anything is subtracted. NOI is what remains after vacancy and every operating expense. On a $300,000 rental at $2,500 a month, gross income is $30,000 and NOI is $18,270, a difference of nearly 40%.

There are two gross figures. Potential gross income assumes full occupancy. Effective gross income subtracts vacancy and credit loss, usually 5 to 8%. Operating expenses come off effective gross income to reach NOI.

A cap rate built on gross income instead of NOI is not a cap rate. It is the inverse of the gross rent multiplier and will run two to three times higher. Listings that quote rent and price without expenses invite exactly that mistake.