Gross Rent Multiplier

Calculator, Deal Analysis, Operations

Use this calculator to quickly compare and screen multiple rental properties in a given market.

The math: (Property Fair Market Value / Annual Gross Rental Income) = GROSS RENT MULTIPLIER

Calculating the Gross Rent Multiplier (GRM) is a quick way to compare multiple rental properties’ return by evaluating the number of years it will take to recover the purchase price through rents, all other variables being equal.

It is not meant to be a forecast for the actual length of time to recover purchase price since it does not take into account vacancy rates, operating expenses, repairs, or financing costs. However, the higher the GRM, the longer it will take to recover your real costs.

A “good” Gross Rent Multiplier will vary depending on the property’s class and type. You should expect lower GRMs for Class B and C properties in secondary/tertiary markets while Class A primary/core market properties will be higher. It’s important to compare apples to apples.

Our calculator allows you to input and compare figures for up to 3 rental properties at once.

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