Gross Rent Multiplier Calculator
Quick property comparison using GRM.
Gross Rent Multiplier (GRM)
Quick property valuation metric
Formula
GRM = Property Price / Annual Gross RentHow to Use
- 1Enter property price — Input the purchase price or listing price.
- 2Enter gross annual rent — Input total annual rental income (before any expenses).
- 3Calculate GRM — GRM = Price ÷ Gross Annual Rent.
- 4Compare properties — Lower GRM generally indicates a better deal relative to rental income.
Frequently Asked Questions
What is a good GRM?
GRM varies by market. 4-7 is typical for smaller markets. 10-15 is common in expensive cities. Compare within the same market for meaningful analysis.
GRM vs cap rate — which is better?
Cap rate is more accurate as it accounts for expenses. GRM is useful for quick screening since it only needs price and gross rent.
Does GRM use gross or net rent?
GRM uses GROSS rent (before expenses). This is both its strength (simplicity) and weakness (ignores operating costs).
How do I find comparable GRMs?
Calculate GRM for recent sales of similar properties in the same area. This gives you a benchmark for evaluating new deals.