Short answer: NOI is operating income minus operating expenses. It excludes loan payments, capital expenses such as a new roof, and non-operating income such as loan proceeds or land sales. NOI matters because it’s what a buyer is really purchasing, and it drives the facility’s value.^[1]

What goes in #

• Operating income: mainly rent, plus fees and other operating income.^[1]
• Operating expenses: utilities, property taxes, insurance, advertising, payroll (even “managerless” facilities have some), website and other running costs.^[1][2]

What stays out #

• Debt payments. A facility bought with all cash or with heavy debt has the same NOI.^[1]
• Capital expenses, such as replacing a roof.^[1]
• Non-operating income, such as refinance proceeds or selling extra land.^[1]

Why it matters #

When you buy a facility you are buying buildings, leases and goodwill, but above all you’re buying its net income stream. Value is based on NOI, which is why Mark tracks actual NOI against budget every month once he owns a property.^[1][3]

Related answers #

• What is a cap rate, and why is it so often misunderstood in self-storage?
• What is the difference between cash-on-cash return (ROI) and IRR in self-storage?
• Why should self-storage owners compare actual NOI with budget NOI every month?

Sources #

Each numbered note above links to the post of Mark’s it comes from.

1. Cap Rates, ROI, IRR – Which Matters Most in Self-Storage?, Mark Helm, August 29, 2025
2. How to Plan for Self-Storage Capital Expenditures, Mark Helm, July 12, 2024
3. The Four Metrics Every Self-Storage Operator Should Track Monthly, Mark Helm, September 12, 2025