Property Valuation
The 'gross income multiplier' (GIM) differs from the gross rent multiplier (GRM) in that GIM uses:
AMonthly rent instead of annual income
BAnnual gross income (including all income, not just rent) rather than monthly rent✓ Correct
CNet income rather than gross income
DCapitalized net operating income
Explanation
The Gross Income Multiplier uses the total annual gross income from all sources (rents, parking, laundry, etc.) rather than just monthly rent (GRM).
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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.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
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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