The price of an asset (usually current price) divided by the net income it generates...

A factor expressing the relationship between value and net operating income; the reciprocal of the overall rate.

As Used in the Income Approach -- A procedure combining information from an operating income statement and sold market data which, when applied to a net stream of monthly income, creates a multiplier for sold comparables. To establish the multiplier, divide the net monthly income by the sales price of the comparable. For example, a comparable sale has gross monthly income of $2,000. The expenses for the month are $1,400. ($2,000-$1,400=$600 net monthly income.) Next divide the sale price of $50,000 by the net monthly income ($600). This provides the net income multiplier of 83.33.

(See also gross income multiplier and income multiplier analysis.) Property market value expressed as a multiple of its net operating income.

A factor representing a property's value as a multiple of net operating income. For example, a property with a market value of $1,000,000 and a net operating income of $100,000 has a net income multiplier of 10.

The price of an asset divided by the net income it generates in a given period of time (for rental property, usually one month).

The relationship between price or value and net income expressed as a factor: The reciprocal of the Overall Rate. Identical answers are found by multiplying net annual income by the Net Income Multiplier (NIM) or dividing it by the Overall Rate. To illustrate: Overall Rate of .106137: $240,000 divided by .106137 = $2,261,228. (Refer to "RECIPROCAL" in glossary).

A factor that, when applied by multiplication to a property's net operating income, results in a property value estimate.