What is gross rent multiplier?
Gross rent multiplier, or GRM, compares a property's price with its gross annual rental income. It is a quick screening measure and does not account for operating expenses, financing, taxes, or vacancies.
GRM formula
GRM = property price ÷ gross annual rent
property price = GRM × gross annual rent
Example
A $300,000 property producing $24,000 in gross annual rent has a GRM of 12.5.
How to calculate GRM
- Take the property price or listing price.
- Add up the gross annual rent. If you only know monthly rent, multiply it by 12.
- Divide the price by the annual rent.
Example: a property listed at $300,000 renting for $2,000 per month has gross annual rent of $24,000, so GRM = 300,000 ÷ 24,000 = 12.5. Put another way, the price is 12.5 times a year of gross rent. A lower GRM means less price per dollar of rent, but only compare properties in the same market and condition.
GRM vs cap rate
| GRM | Cap rate | |
|---|---|---|
| Uses | Gross rent | Net operating income |
| Includes expenses | No | Yes |
| Best for | Quick first screening | Closer comparison of returns |
After screening with GRM, check the numbers with the Cap Rate Calculator and the Cash on Cash Return Calculator.
This is a gross rent multiplier calculator for screening rental properties. If you need to calculate GRM or calculate gross rent multiplier, enter the property price and gross annual rent, or use the reverse mode to estimate a price from a target GRM.
Frequently asked questions
What is the GRM formula?
GRM = property price ÷ gross annual rent. To find price from a target GRM, multiply the GRM by gross annual rent.
What is a good GRM?
There is no universal number. Typical GRMs differ by city, property type, and rent level, so compare against similar nearby properties rather than a fixed benchmark.
Is GRM the same as cap rate?
No. GRM uses gross rent and ignores operating expenses, while cap rate uses net operating income.
Does a lower GRM always mean a better investment?
No. GRM is only a screening metric. Compare properties with similar markets, condition, rents, expenses, and financing assumptions.
Can I calculate a property price from GRM?
Yes. Enter gross annual rent and a target GRM and the calculator works backward to estimate price.
What is a good GRM?
A lower GRM means you pay less per dollar of annual rent, but a good GRM depends on the local market, property type and condition. Compare GRMs of similar properties in the same area rather than using one fixed number.