The gross rent multiplier is also called as the gross rate multiplier, or gross income multiplier (GIM). It is the number of years the property would take to pay for itself in gross received rent. It considers additional sources of income like onsite coin laundry.
Gross Rent Multiplier = Property Price / Gross Rental Income
Let’s say a 4-unit building with an asking price of $400,000 and gross annual rents of $38,400. According, to the formula, GRM would be:-
GRM = $400,000/$38,400
Therefore, Gross Rent Multiplier = 10.42
May 22, 2018
Created: May 22, 2018
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