Property Valuation
What does the Gross Rent Multiplier (GRM) method of valuation use to estimate property value?
AAnnual net operating income divided by the cap rate
BMonthly gross rent multiplied by the GRM factor✓ Correct
CAnnual operating expenses divided by effective gross income
DMonthly net income multiplied by 12
Explanation
The Gross Rent Multiplier method estimates value by multiplying the gross monthly rent by the GRM (derived from comparable sales). Formula: Value = Monthly Gross Rent × GRM. It is a quick estimation tool, not as precise as direct capitalization.
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