Property Valuation
The gross income multiplier (GIM) differs from the gross rent multiplier (GRM) in that GIM uses:
ANet income rather than gross income
BAnnual income including all revenue sources, not just base rent✓ Correct
CMonthly income only
DIncome after deducting operating expenses
Explanation
GIM uses total gross annual income from all sources (not just rental income), while GRM typically uses just rental income.
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Key Terms to Know
Gross Rent Multiplier (GRM)
A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Math Concepts
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