🏘️ Gross Rent Multiplier Calculator
Calculate GRM from property price and annual gross rental income for quick property comparison.
Using GRM to Screen Properties
GRM = Property Price ÷ Annual Gross Rental Income. A lower GRM means more rent relative to price — generally more attractive for investors. GRM of 8–12 is common in many US markets. GRM is a quick screening tool, not a final valuation method — it ignores vacancies, expenses, and financing. Use it to eliminate overpriced properties quickly before doing detailed analysis.
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GRM varies significantly by market. In high-cost urban areas (NYC, SF), GRM of 15–25 is common. In secondary markets, 8–12 is typical. Rural areas may see GRM of 5–8. Always compare to local market GRM — a lower GRM than comparable properties indicates relative value.
GRM uses gross rents (before expenses); cap rate uses net operating income (after expenses). GRM is faster to calculate but less accurate. Cap rate accounts for vacancy and operating costs, making it more reliable for comparing investment returns. Use GRM to screen, cap rate to evaluate.