Gross Rent Multiplier Calculator
Calculate GRM to evaluate and compare rental property investments quickly
Calculate Gross Rent Multiplier
Market value or asking price of the property
Total rental income before expenses
GRM Analysis Results
Calculation Details
Formula: GRM = Property Price ÷ Annual Gross Rent
Property Price: $0
Annual Gross Rent: $0
GRM: 0.00
GRM Interpretation Guide
Note: These ranges are general guidelines. Local market conditions may affect what constitutes a good GRM.
Example Calculation
Investment Property Example
Property Price: $500,000
Monthly Rent: $3,500
Annual Gross Rent: $42,000
Market: Suburban area
GRM Calculation
GRM = $500,000 ÷ $42,000
GRM = 11.9
This indicates a good investment opportunity
Comparison Property
Property B: $600,000 / $35,000 = GRM 17.1
Property A offers better value (lower GRM)
GRM Investment Tips
Lower is Better
Lower GRM typically indicates better cash flow potential
Compare Markets
GRM varies by location - compare within same market
Consider Expenses
GRM doesn't include operating expenses - use with other metrics
Factors Affecting GRM
Location and neighborhood quality
Property condition and age
Local rental market demand
Economic conditions
Property type and amenities
Understanding Gross Rent Multiplier (GRM)
What is GRM?
The Gross Rent Multiplier (GRM) is a quick screening tool used by real estate investors to evaluate and compare investment properties. It measures how many years of gross rental income it would take to pay for the property purchase price.
Why Use GRM?
- •Quick property comparison tool
- •Initial screening for investment potential
- •Simple calculation requiring minimal data
- •Market value assessment
GRM Formula
GRM = Property Price ÷ Annual Gross Rental Income
GRM Limitations
- Operating Expenses: GRM doesn't account for maintenance, taxes, insurance
- Vacancy Rates: Assumes 100% occupancy
- Property Condition: Doesn't consider repair needs
- Market Timing: Real estate cycles affect GRM values
Tip: Use GRM with other metrics like Cap Rate and Cash-on-Cash return for complete analysis