Property Valuation
A gross rent multiplier (GRM) is calculated by dividing the:
ANet Operating Income by the capitalization rate
BSale price by the monthly gross rent✓ Correct
CAnnual expenses by the annual gross income
DEffective gross income by the vacancy rate
Explanation
GRM = Sale Price / Monthly Gross Rent. It is a quick valuation tool used for smaller income properties. For example, a property selling for $300,000 with $2,000/month rent has a GRM of 150.
Related Arizona Property Valuation Questions
- Economic life of a building in the cost approach refers to:
- A Comparative Market Analysis (CMA) in Arizona is prepared by a real estate agent and is:
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- The appraisal approach most commonly used to estimate the value of single-family residential properties in Arizona is the:
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- Highest and best use in Arizona appraisal analysis means the use that is:
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