Definitions for

**"GROSS INCOME MULTIPLIER"****Related Terms:**Grm, Gross rent multiplier, Income approach to value, Vacancy factor, Direct capitalization, Gross operating income, Income approach, Effective gross income, Egi, Capitalization, Net operating income, Income capitalization approach, Noi, Capitalization rate, Operating expense ratio, Potential gross income, Cap rate, Taxable value, Rental income, Building residual technique, Gross yield, Assess, Net income multiplier, Real income, Net rental income, Cca, Savings ratio, Tax base, Adjusted available income, Housing expense-to-income ratio, Adjusted basis, Capital cost allowance, Cost recovery, Plus valia, Valor catastral, Efficiency ratio, Effective tax rate, Net effective income, Assessment ratio, Gross, Approaches to value, Assessed value, Gross revenue, Ad valorem, Housing expense ratio, Cost approach to value, Adjusted cost basis, Overall capitalization rate, Adjusted gross estate

A figure which, when multiplied by the annual gross income, will theoretically determine the market value of a property. The ratio between the sale price of a property and its gross income.

The ratio between sale price or value and potential or effective annual gross income.

The factor by which gross income is multiplied in order to obtain an estimate of value.

That number which, when multiplied times the gross income, would give an indication of property value. It is strictly a guide and frequently abused.

Evaluation technique that describes the relationship between the sales price and gross revenue. Sometimes called a gross rent multiplier.

Sales Price/Gross Annual Income Note 1: Ideally the Gross Income used is the Gross Income for the next 12 months. So, if a property is just sold, the GIM is calculated as follows: Sales Price/Gross Annual Income for the next 12 months. Clearly, this number is an estimate because the future is uncertain. Note 2: Gross Income is interpreted differently by different practitioners. Some use potential gross income (all units are assumed to be 100% occupied. Some people use effective gross income (potential gross income - vacancies). Loan Constants: The payment (PMT) required on a $1 loan given a specific length of time and interest rate. The loan constant is very useful to help determine cash flows during "quick and dirty" analysis Example: A mortgage, monthly payments, 30 years, 12% nominal-- PV = $1, n = 360, i = 1%-- loan constant

A figure used as a multiplier of the gross income of a property from all sources to produce an estimate of the property's value.

A calculation rate used with the income approach to estimating value, particularly for commercial, industrial and larger residential apartment properties. It is used instead of the gross rent multiplier because such larger facilities often generate revenue from other non-rent incomes. For more information, see the "Analyzing Appraisal Reports" article in the "Loan Process" section.

A useful rule of thumb to estimate market value of income producing residential property. The multiplier is derived by using comparable sales divided by the actual or estimated monthly rentals and arriving at an acceptable average.

A figure used as a multiplier of the gross annual income of a property to produce an estimate of the prop erty's value.

Using the gross annual income of a property to calculate an estimate of a property's value.

A figure which, when multiplied by the annual gross income, will theoretically determine the fair market value. A general rule of thumb which varies with specific properties and areas.

Referred to the relationship between sales price and income, expressed as ratio. A figure used as a multiplier of the gross income of a property to produce an estimate of the property's value.

Same as gross rent multiplier.

A rule of thumb for estimating the market value of commercial and industrial properties, the ratio to convert annual income into market value

Also known as gross rent multiplier. Method used to compute the price of an income-producing property by dividing the asking or market price of the property by the current gross rental income. If the current gross rental income is $30,000 and the asking price is $300,000, the gross income multiplier is 10.

A figure used as a multiplier of an income producing property's gross annual income to estimate its value.