Is your property actually making money? That’s where Net Operating Income (NOI) comes in. NOI is one of the most important tools for understanding your rental property’s performance.

Let’s break down what NOI really means, how to calculate it, why it matters, and how you can use it to boost your bottom line—especially in Colorado’s ever-changing rental market.

What is Net Operating Income (NOI)?

Net Operating Income (NOI) tells you how much income your property brings in after covering the day-to-day costs of running it—but before things like mortgage payments, income taxes, or capital expenses.

Here’s the formula: NOI = Total Revenue – Operating Expenses

Is it 30% or higher? (That’s a healthy benchmark in many Colorado markets!)

Tally your Operating Expenses and it might include:

• 🔹Property management fees
• 🔹Maintenance and repairs
• 🔹Property taxes
• 🔹Insurance
• 🔹Utilities (if you cover them)
• 🔹Legal or admin costs
• 🔹Marketing and advertising

Once you subtract operating expenses from your total revenue, you’ve got your NOI. 

How Does Your NOI Stack Up?

Once you’ve run the numbers, it’s time to see how your NOI compares to what’s typical in your market. A positive NOI means your property is generating income after covering operating costs. If it’s negative, it’s a signal to dig into what’s going wrong—whether it’s high expenses, low rent, or frequent vacancies. 

In the Denver Metro Area, a healthy NOI is often around 30% of your gross rental income. 

If your NOI is under 30%, it might be worth reviewing your expenses—are there areas where you’re overspending? Could you improve efficiency or boost income?

If your NOI is 30% or higher, great news—your property is performing well, and you’re likely in a strong position for long-term profitability.

How to Improve Your NOI: 

To maximize your NOI, focus on two key areas: increasing income and cutting unnecessary costs.

Ways to Increase Income

• 🔹Adjust Rent Strategically
  Regularly review the local market and make sure your rent stays competitive.
• 🔹Add Extra Revenue Streams
  Think beyond rent: reserved parking, pet fees, or storage space rentals.
• 🔹Keep Great Tenants
  Turnover is expensive. Offer lease renewal perks or quick responses to maintenance issues to keep renters happy—and in place.

Ways to Reduce Expenses

• 🔹Renegotiate Service Contracts
  Shop around or renegotiate with contractors like landscapers, maintenance crews, and insurance providers. 
• 🔹Invest in Energy Efficiency
  Upgrades like LED lighting, smart thermostats, or low-flow plumbing fixtures might cost a little upfront, but they’ll save you in the long run.
• 🔹Practice Preventative Maintenance
  Stay ahead of costly repairs by scheduling regular inspections. It’s easier (and cheaper) to fix a small issue before it becomes a big one.

A Smarter Way to Manage Your Rentals

Whether you’re just starting out or managing a growing portfolio: understanding, monitoring and improving your NOI can help you protect your investment, increase its value, and position yourself for long-term success by making data-driven decisions.

At Integrity Realty Management, we help property owners like you cut through the confusion, optimize their operations, and get the most from their investments—without all the stress.

📊 Reach out today for a free rental analysis and expert support that puts your goals first.