Property Valuation
Gross Rent Multiplier (GRM) is calculated as:
AAnnual NOI ÷ Annual Gross Rents
BPurchase Price ÷ Gross Monthly (or Annual) Rent✓ Correct
CMonthly Cash Flow ÷ Monthly Expenses
DEffective Gross Income ÷ Vacancy Rate
Explanation
GRM = Purchase Price ÷ Gross Rent (monthly or annual, depending on convention). For example, a property selling for $360,000 with $3,000/month gross rent has a GRM of $360,000 ÷ $3,000 = 120. GRM is a quick screening tool but does not account for expenses.
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