Real estate & rental
Real Estate Gross Rent Multiplier Calculator
Gross rent multiplier, a fast screening ratio for comparing properties before doing the real work.
Result
An arithmetic tool, not investment advice. Property returns depend on the local market, the condition of the building, financing terms and tax position, none of which a calculator can see. Verify the income and expense figures against actual statements rather than a seller's projection. GRM ignores expenses entirely, which is its whole weakness. Two properties with the same GRM can have completely different returns if one pays its own utilities and the other does not. Use it to shortlist, never to decide.
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About this calculator
What is a good GRM?
Entirely market dependent, typically 8 to 12 in many US markets and far higher in expensive coastal ones. It is only meaningful against comparable local properties.
Why use GRM at all when cap rate is better?
Because it needs only two numbers and works when expense figures are unavailable or untrustworthy. It is a filter for a list of fifty properties, not an analysis of one.
The formula
GRM = price / gross annual rent
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