Gross Rent Multiplier (GRM) Calculator
Find the gross rent multiplier (GRM) of a rental property. Enter the price and the gross annual or monthly rent to see the GRM, the years of rent it represents and the price implied by a target GRM.
How to calculate gross rent multiplier
- Enter the property price or value.
- Enter the gross annual rent, or switch to monthly and enter the monthly rent.
- Read the GRM, then set a target GRM to see the price it implies.
Examples
300,000 price with 30,000 annual rent
Property price 300,000, gross annual rent 30,000
GRM 10
Frequently asked questions
What is the gross rent multiplier?
The gross rent multiplier (GRM) is the property price divided by its gross annual rent. It is a quick way to compare rental properties and estimate how many years of gross rent equal the purchase price.
How is GRM calculated?
Divide the property price by the gross annual rent. For example, a 300,000 property with 30,000 of annual rent has a GRM of 10, meaning the price equals ten years of gross rent.
Is a lower GRM better?
Generally yes. A lower GRM means you pay less for each dollar of rent, so the property is cheaper relative to income. A high GRM can signal an overpriced property or a low-yield market.
How is GRM different from cap rate?
GRM uses gross rent and ignores operating expenses, so it is a rough screening tool. Cap rate uses net operating income after expenses, giving a more complete picture of profitability.
How do I find a price from a target GRM?
Multiply your target GRM by the gross annual rent. For example, a target GRM of 8 on 30,000 of annual rent implies a price of 240,000. This calculator shows that implied price automatically.
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