Why Lenders Trust NOI Over Net Income

Neerja Kwatra
Oct 29
1 min read

NOI (Net Operating Income) is the heartbeat of property performance. It excludes taxes, interest, and depreciation — showing pure operational strength.

Why NOI Matters

Determines valuation: Appraisers and lenders use it to calculate cap rates.
Supports financing: Higher NOI improves DSCR and borrowing power.
Guides management: Reveals where operational efficiencies drive value.

Tip: Reforecast NOI quarterly, not just annually. Market shifts faster than CPAs file.

⚠️ This blog is for informational purposes only. It may not apply to your specific situation. Please consult your CPA.

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