Gross Rent Multiplier (GRM)
A quick valuation tool equal to sale price divided by gross rent, using gross income rather than net.
The gross rent multiplier is a fast way to compare income properties. It equals the sale price divided by the gross rental income. Because it uses gross rent, it does not account for vacancy or operating expenses.
GRM is a screening tool, not a precise value. Appraisers use it for quick comparison and rely on the full income approach for a supported value.
On the exam
Worked example
A 480,000 dollar price divided by 57,600 dollars of gross annual rent equals a GRM of 8.33.
Exam trap
Tested in
Appraisal (8% of the exam)
From definition to recall
See this term inside a real exam question.
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