An Arizona rental property is purchased for $280,000. Annual gross rent is $26,400. What is the gross rent multiplier (using annual income)?
Why 10.6 Is Correct
Answer B: 10.6
Exam Tip: Real Estate Math
Math questions are formula-based. Memorize the key formulas: commission splits, proration, cap rate (NOI ÷ Value), GRM (Price ÷ Gross Rent), and LTV (Loan ÷ Value). Practice converting between annual and monthly figures.
People Also Study
Related Arizona Questions
- A property in Arizona has a gross rent multiplier (GRM) of 120 and rents for $1,800 per month. What is the estimated value using the GRM method?Property Valuation
- An Arizona rental property generates $2,400 per month in rent. The gross rent multiplier (GRM) for comparable properties is 135. What is the estimated value?Real Estate Math
- In Arizona, the 'gross income multiplier' (GIM) at the annual level is used differently from the GRM (gross rent multiplier) in that:Property Valuation
- A 12-unit apartment building sells for $1,440,000. Annual gross rents are $120,000. What is the Gross Rent Multiplier (GRM) using annual rents?Real Estate Math
- An Arizona appraiser is valuing a historic adobe home. There are very few comparable sales and it generates no rental income. Which appraisal approach would MOST likely be given the most weight?Property Valuation
- A property generates $36,000 annual gross rent. The vacancy and credit loss is 5%. What is the effective gross income (EGI)?Real Estate Math
- An Arizona investor buys a rental property for $250,000. Annual rent is $24,000, operating expenses are $8,000, and annual mortgage payments are $14,400. What is the annual cash flow before taxes?Real Estate Math
- In Arizona, the 'effective gross income multiplier' (EGIM) is more useful than the GRM because:Property Valuation
Key Terms to Know
A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
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.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
Math Concepts
Study This Topic
Practice More Arizona Real Estate Questions
1,400+ questions covering all exam topics. Start free — no signup required.
Take the Free Arizona Quiz →