Real Estate Math
A Florida property rents for $2,200 per month. The gross rent multiplier (GRM) for comparable properties is 150. What is the estimated value?
A$264,000
B$330,000✓ Correct
C$396,000
D$660,000
Explanation
Using annual rent: $2,200 × 12 = $26,400/year. Value = GRM × Annual Rent = 150 × ...
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Key Terms to Know
Gross Rent Multiplier (GRM)
A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
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.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Math Concepts
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