Definitions for

**"Gross rent multiplier"****Related Terms:**Grm, Gross income multiplier, Income approach to value, Income approach, Adjusted sales price, Rental income, Comparable, Direct capitalization, Economic rent, Net rental income, Capitalization, Vacancy factor, Comparables, Market rent, Capitalization rate, Taxable value, Assess, Income capitalization approach, Market approach, Appreciated property, Overall capitalization rate, Appraised value, Building residual technique, Assessed value, Property value, Gross operating income, Comparable sales, Comps, Cap rate, Plus valia, Fair market rent, Assessed valuation, Appraisal, Potential gross income, Assessment ratio, Bargain sale, Appraisal methods, Adjusted basis, Proposition 13, Property appraisal, Allocation method, Approaches to value, Valuation, Comparative market analysis, Adjusted cost basis, Real income, Residual value, Net operating income, Appreciation, Valor catastral

A figure derived from the relationship between gross rental income and sales price. Used to compare rental properties.

A factor derived by dividing the selling price of a property by its gross rents, either monthly or annually, which is used as a unit of comparison to estimate subject value in an appraisal.

The quotient of the sale price divided by the gross rent.

in single-family homes, the ratio between the price of a property and the monthly rental profit.If you are purchasing real estate owned property with the intention of renting it, determining the gross rent multiplier can help you determine whether a property will be profitable in the long run.

(See gross income multi

a crude way to put a value on a property

A method of estimating or expressing a property's value as a multiple of its gross rental income.

The factor by which gross rent is multiplied in order to obtain an estimate of value.(empty) Improvement Anything done to raw land with the intention of increasing its value. Income The payments to its owner that a property is able to produce in a given time span. Income Approach Uses capitalization to convert the anticipated benefits of the ownership of property into an estimate of present value. Intangible Property Evidence of ownership of value or the right to value, for notes, bonds, stocks, etc.(empty)(empty)

The sales price divided by the Gross Operating Income (GOI). A factor commonly used as a valuation indicator for properties such as Motels and Apartment buildings.

The relationship or ratio between the sale price or value of a property and its gross rental income.

A figure that produces an estimate of the property's value when used as a multiplier of the gross income of a property.

Sales Price/Monthly Rental Income Example of GRM usage: Say, recent sales of properties similar to the subject property you are evaluating, had GRM's of 110 to 130. If the subject property has rental income of $3,000 per month, the property would roughly be valued at $330,000 conservatively to $390,000 aggresively.

(GRM) The GRM is a factoring tool used by the property appraiser to assess the market value of a property, under the income valuation approach. The multiplier is a rate based on the sales price divided by the gross monthly rent of comparable properties. This multiplier is then applied to the market rent of the subject property to estimate the value of that property. For example, if an appraiser is analyzing a four-flat and discovers that similar four-flats in the area have market values that are 10.5 times their market rents, the appraiser will use a GRM of 105. Applied to the subject property, the appraiser will multiply the subject property's market rental income by 10.5 to estimate the property's value via the income approach. Commercial, industrial and larger residential properties use the gross income multiplier system. For more information, see the "Analyzing Appraisal Reports" article in the "Loan Process" section.

The figure used as a multiplier of the gross monthly income of a property to produce an estimate of the property's value.

A rule of thumb method frequently used by some individuals that arrives at an estimate of fair market value by multiplying gross rental income by a factor that varies with the type of property and its location.

The relationship between a property's price and the gross rental income that it generates. Used to establish a property's value within a specific geographic area.

the sales price divided by the gross annual rental income. Another common real estate investing term.

Comparing imputed market rents to estimate the value of residential real estate by the income approach.

The factor used by appraisers for the income method of valuing properties. Sales prices of comparable properties are divided by gross income (either monthly or annual) to arrive at typical GRM levels; the average or a representative GRM factor is used to estimate the market value of the subject property.

The sales price divided by the contract rental rate.

Also known as the Gross Multiplier or Rent Multiplier, with regard to appraisal; it is calculated by dividing the sales price of a comparable property by it's gross monthly rent or gross annual income the result of which is used to calculate the gross income of the subject property.

Also known as gross income 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 rent multiplier is 10.

Ratio of sales price to monthly rental income for single family residential properties.

Gross Rent Multiplier is the ratio of the price of a piece of a real estate investment to its annual rental income before expenses such as property taxes, insurance, and even utilities for vacation rental properties. Other expenses could include the cost of hiring a property management company. To sum up Gross Rent Multiplier it is the number of years the property would take to pay for itself in gross received rent.