Property Valuation
Gross Rent Multiplier (GRM) is calculated as:
AAnnual NOI ÷ Property Value
BProperty Value ÷ Monthly Gross Rent✓ Correct
CMonthly Rent × 12
DProperty Value × Cap Rate
Explanation
GRM = Property Value ÷ Monthly Gross Rent. It is a quick valuation tool for residential income properties. Example: $600,000 ÷ $4,000/month = GRM of 150.
Related California Property Valuation Questions
- The economic principle of 'plottage' refers to:
- An appraiser determines that the highest and best use of a parcel is for commercial development, not its current residential use. How does this affect the appraisal?
- Plottage (assemblage) refers to:
- What is 'physical deterioration' in property appraisal?
- The principle of progression means:
- What is the purpose of the 'Uniform Standards of Professional Appraisal Practice' (USPAP)?
- Gross Rent Multiplier (GRM) is calculated by:
- In real estate appraisal, what does 'highest and best use' mean?
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