Gross Rent Multiplier
Property value divided by gross potential rent.
Example Result
Sample DataBased on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.
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What This Means
A sample property priced at $385,000 with $2,850/month rent has a gross rent multiplier of 11.60x at Purchase (Month 0). GRM is the fastest back-of-napkin screening tool in real estate. If similar properties in a market sell at 10x GRM and you find one at 8x, it may be undervalued. But always dig deeper — a low GRM might also signal high expenses or deferred maintenance.
Where This Value Comes From
Gross Rent Multiplier is not entered directly — it is calculated from Gross Potential Rent and Property Value. See the formula breakdown above and the detailed inputs below.
Inputs That Determine Gross Rent Multiplier
Calculations That Use Gross Rent Multiplier
Platform Distribution
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Unlock Rental Property CalculatorWhy It Matters
GRM is the fastest back-of-napkin screening tool in real estate. If similar properties in a market sell at 10x GRM and you find one at 8x, it may be undervalued. But always dig deeper — a low GRM might also signal high expenses or deferred maintenance.
Detailed Explanation
The Gross Rent Multiplier (GRM) shows how many years of gross rent it would take to equal the purchase price. Lower GRMs generally indicate better value, though this metric ignores expenses entirely.
Example
Based on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.
Related Calculations
Gross Potential Rent
2Total annual rental income assuming full occupancy.
Effective Gross Income
2Actual expected income after vacancy and other income.
Net Operating Income
UIncome remaining after all operating expenses but before debt service.
Cash Flow Before Tax
VCash remaining after operating expenses and debt service.
Cash Flow After Tax
WCash remaining after all expenses, debt service, and estimated taxes.
Revenue Per Unit
2Effective gross income divided by the number of units.
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