Gross Rent Multiplier Calculator

Use this free Gross Rent Multiplier calculator to make better property management decisions. Enter your values below to get instant results.

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How to Use This Calculator

1 Enter the property purchase price
2 Enter the annual gross rental income
3 Click Calculate to see the GRM
4 Compare to similar properties in your market
5 Lower GRM = more income relative to price

Example Calculation

Comparing two multifamily properties

Inputs:

Property A: $400,000 price, $48,000 annual rent
Property B: $500,000 price, $55,000 annual rent

Result:

GRM A = 8.3 | GRM B = 9.1 — Property A is priced more attractively relative to income

Important Considerations

• GRM doesn't account for expenses—high-expense properties look artificially good
• Significantly below-market GRM may indicate hidden problems
• Use GRM for comparison only, not as primary decision metric

Frequently Asked Questions

Lower GRM means more income relative to price. GRM of 4-7 is attractive; 8-12 is typical; above 15 may be overpriced relative to rent. GRM varies significantly by market and property type—always compare similar properties.

GRM uses gross income and is simpler (Price ÷ Gross Rent). Cap rate uses NOI (after expenses) and is more accurate. GRM is a quick screening tool; cap rate is for detailed analysis. They often move in opposite directions.

Yes. Value = Annual Rent × Market GRM. If similar properties trade at GRM 8 and your property grosses $50,000/year, estimated value is $400,000. It's less precise than cap rate valuation but useful for quick estimates.

GRM requires less information—just price and rent. It's useful when expense data is unavailable or unreliable. For quick market comparisons or initial screening, GRM is faster. For serious analysis, cap rate is more accurate.