Net Operating Income (NOI) is the foundation of self-storage investing. It is calculated as operational income minus operational expenses. Income typically includes rental revenue, while expenses cover property taxes, advertising, utilities, payroll, and other operating costs. NOI does not include loan payments, capital expenditures, or one-time income like land sales or refinancing. NOI is important because it represents the true income stream you are buying. Appraisers use NOI with CAP Rates to determine property value, and investors use NOI to judge whether a deal makes sense. Ultimately, when you buy a self-storage property, you are buying its NOI.
