What does a positive Net Operating Income indicate?

A positive Net Operating Income (NOI) indicates that the income generated from a property exceeds the expenses associated with operating that property. This signifies that the property is financially healthy and capable of generating profit before accounting for financing costs, taxes, and other non-operating expenses. It reflects the operational efficiency of the property management in generating revenue while effectively controlling costs. When the income surpasses the expenses, it enhances the potential for positive cash flow and may support property value appreciation, making this measurement crucial for investors and property managers.