What is GRM (Gross Rent Multiplier)?
Gross Rent Multiplier is a quick screening tool that compares a property's price to its annual gross rent. Lower GRM means the property generates more rent relative to its price. It is useful for fast comparisons but does not account for expenses.
Formula
GRM = Property Price / Annual Gross Rent
Good
8-12 in most markets
Great
Below 8 (strong rent relative to price)
Watch For
Above 15 usually means rent is too low relative to price for good cash flow
Frequently Asked Questions
What is a good GRM for rental property?
A good GRM is 8-12 in most markets. A great GRM is Below 8 (strong rent relative to price). Be cautious if Above 15 usually means rent is too low relative to price for good cash flow.
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