What is the term for profits generated from a property after deducting operating expenses?

The term that refers to profits generated from a property after deducting operating expenses is net operating income. This financial metric is essential for understanding the profitability of a property; it represents the income the property generates from rents and other sources minus the costs directly associated with operating the property, such as property management fees, maintenance, taxes, and insurance.

Net operating income specifically focuses on those revenues and expenses that are associated with the property itself, excluding financing costs, capital expenditures, or depreciation. This makes it a critical figure for investors and property managers, as it provides a straightforward way to evaluate the operational effectiveness of a real estate investment.

Understanding this concept is vital for anyone involved in property management or investment, as it helps in assessing whether a property is performing well and in making decisions regarding investments or property improvements.