Property Valuation
Gross Rent Multiplier (GRM) is calculated as:
AAnnual gross income divided by capitalization rate
BSales price divided by monthly gross income✓ Correct
CMonthly rent multiplied by vacancy rate
DNet operating income divided by sales price
Explanation
GRM = Sale Price ÷ Monthly Gross Rent. It is a quick, simple tool for estimating the value of income property. For example, a building that sells for $600,000 and rents for $5,000/month has a GRM of 120.
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