What is the definition of Net Operating Income (NOI)?

Net Operating Income (NOI) is a key metric in real estate that represents the income generated from a property after all operating expenses are deducted, but before accounting for taxes and financing costs. The correct choice reflects this definition accurately.

By calculating the gross rental income or total revenue from the property and subtracting operating expenses, such as property management fees, maintenance costs, property taxes, and insurance, investors can determine the profitability of their property operations. This figure is crucial for evaluating the performance of a real estate investment, as it provides a clear picture of the income the property generates, allowing for better investment decisions and comparisons with other properties.

The other options do not accurately describe NOI. Total revenue from property doesn’t account for expenses, profit after tax deductions includes factors that are beyond operating expenses, and revenue generated by property investments doesn’t specify the operating costs involved in deriving true income from the property. Thus, option B accurately encapsulates the definition of Net Operating Income.