EBITDA

EBITDA is a company's earnings before interest, taxes, depreciation and amortization. It is the closest corporate analogue to net operating income, because both stop before financing and both leave depreciation out. A rental property's NOI is, in effect, its EBITDA.

The match is closer than with EBIT, which Wikipedia uses as the redirect target for net operating income. EBIT deducts depreciation. NOI does not. On the default property, $18,270 of NOI is the EBITDA of the house: rent in, operating costs out, nothing yet for the lender or the tax return. Deduct a depreciation charge of roughly $8,700 a year on a $240,000 building and you have the EBIT version, which nobody in real estate uses.

The Wikipedia article raises the standard objection to EBITDA, that it ignores the money a business must spend to replace worn assets. The same objection applies to NOI, which is why this calculator carries a 5% capital reserve inside operating expenses. Without it, the $18,270 would be $19,695 and the roof would still need replacing.

Further reading: EBITDA on Wikipedia.