Value Based on GRM

Property value estimated using the gross rent multiplier.

Example Result

Sample Data

$396,550

Based on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.

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Value Based on GRM Formula

Gross Annual Rent x GRM

$34,200 x 11.60x

$396,550

What This Means

A sample property priced at $385,000 with $2,850/month rent has a value based on grm of $396,550 at Purchase (Month 0). GRM-based valuation is a quick sanity check. By comparing the GRM-implied value to the actual asking price, you can quickly identify properties that may be over- or under-priced.

Where This Value Comes From

Value Based on GRM is not entered directly — it is calculated from Gross Rent Multiplier and Gross Potential Rent. See the formula breakdown above and the detailed inputs below.

Inputs That Determine Value Based on GRM

Gross Rent Multiplier

Property value divided by gross potential rent.

11.60x

Purchase

Gross Potential Rent

Total annual rental income assuming full occupancy.

$34,200

Purchase

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Why It Matters

GRM-based valuation is a quick sanity check. By comparing the GRM-implied value to the actual asking price, you can quickly identify properties that may be over- or under-priced.

Detailed Explanation

This valuation approach multiplies the property's gross annual rent by its GRM to estimate value. It is a simpler but less precise valuation method than cap rate analysis.