How this calculator works
Use gross rent for one full year and a purchase price or value from the same comparison. GRM is a quick ratio, so two properties with the same multiplier can still have very different taxes, vacancies and repair costs. It does not estimate the number of years required to earn back your invested cash.
Formula
GRM = property price / gross annual rent. Price = GRM × annual rent. Annual rent = price / GRM.
Worked example
A $600,000 property producing $60,000 gross annual rent has a GRM of 10. At a target GRM of 8, the same rent implies $480,000.
Advertisement
Frequently asked questions
Can I use monthly rent?
Multiply monthly rent by twelve first. Mixing annual and monthly periods changes the multiplier by a factor of twelve.
Does a low multiplier always mean good value?
No. High expenses, deferred repairs or insecure rent can outweigh the lower price.
How does GRM differ from cap rate?
GRM uses gross rent. Cap rate compares net operating income with property value.