Net Operating Income by Purchase Price
NOI scales with rent, and rent scales loosely with price, so the table below is nearly a straight line. The expense ratio and cap rate columns are the ones to compare against your market. Assumptions: rent at 0.85% of price, 5% vacancy, taxes 1.2% and insurance 0.5% of price, 18% of collected income for maintenance, reserves and management.
| Price | Typical rent | Operating expenses | NOI | Expense ratio | Cap rate |
|---|---|---|---|---|---|
| $100k | $850 | $3,444 | $6,246 | 36% | 6.25% |
| $150k | $1,275 | $5,166 | $9,369 | 36% | 6.25% |
| $200k | $1,700 | $6,888 | $12,492 | 36% | 6.25% |
| $250k | $2,125 | $8,611 | $15,615 | 36% | 6.25% |
| $300k | $2,550 | $10,333 | $18,737 | 36% | 6.25% |
| $350k | $2,975 | $12,055 | $21,860 | 36% | 6.25% |
| $400k | $3,400 | $13,777 | $24,983 | 36% | 6.25% |
| $500k | $4,250 | $17,221 | $31,229 | 36% | 6.25% |
| $600k | $5,100 | $20,665 | $37,475 | 36% | 6.25% |
| $750k | $6,375 | $25,832 | $46,844 | 36% | 6.25% |
| $1m | $8,500 | $34,442 | $62,458 | 36% | 6.25% |
| $1.5m | $12,750 | $51,663 | $93,687 | 36% | 6.25% |
| $2m | $17,000 | $68,884 | $124,916 | 36% | 6.25% |
Each price has its own page with rent, tax and vacancy sensitivity tables. Or run your exact property in the NOI calculator.