Valuation & Yield
Net Operating Income (NOI)
Bottom Line Up Front: NOI captures the pure operating cash flow of an asset before debt service or income taxes and serves as the numerator for Cap Rate valuation.
Formula / Statutory Rule
NOI = Effective Gross Income (EGI) − Operating Expenses (Taxes, Insurance, HOA, Management, Maintenance)Scottsdale & Greater Phoenix Benchmark (HomeDaddy AI)
Maricopa County low effective property tax rates (0.51%–0.62%) allow Phoenix and Scottsdale rental properties to retain 64%–72% of gross rent as NOI.
Stephen R. Mannenbach is a Licensed Real Estate Salesperson / REALTOR® in the State of Arizona (ADRE #SA713873000), brokered by HomeSmart LLC. Equal Housing Opportunity. All property square footage, HOA fees, school boundaries, business financials, and market statistics are deemed reliable but not guaranteed and should be independently verified through ARMLS and Maricopa County records.
Capitalization Rate (Cap Rate)IRC Section 1031 Tax-Deferred Like-Kind ExchangeBINSR (Buyer’s Inspection Notice and Seller’s Response)ADU (Accessory Dwelling Unit / Casita) & Arizona HB 2720After-Repair Value (ARV)Scottsdale & Phoenix Short-Term Rental (STR) Licensing OrdinanceCash-on-Cash (CoC) Return