Net Operating Income (NOI)
Net income generated by a rental vehicle.
While the net operating income takes into account all operating expenses, it does not account for loan payments.
It can therefore be used to compare rental vehicles irrespective of financing terms.
NOI = Operating Income - Operating Expenses
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Operating Income
Total income generated by a rental vehicle, less the inactivity expense. Sometimes also called effective gross income (EGI). How Is It Calculated? Operating Income = Gross Rent - Vacancy Expense + Other Income
Operating Expenses
Total expenses you will incur while renting out a vehicle, excluding any loan payments. Examples include: taxes, insurance, management fees, maintenance, capital expenditures and repairs. How Is It Calculated? Operating Expenses = Expense 1 + Expense ...
Capitalization Rate (Cap Rate)
A rate of return of a rental vehicle based on comparing the yearly net operating income (NOI) to the purchase price or market value. Since the cap rate does not take into account loan payments, it can be used to compare rental vehicles irrespective ...
Cash Flow
The total net amount you will receive from a rental vehicle as income. Cash flow accounts for all sources of income and all expenses, including loan payments if you are using financing. How Is It Calculated? With Financing: Cash Flow = NOI - Loan ...
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