Property Valuation
The 'gross rent multiplier' (GRM) is calculated by:
ADividing the property value by the annual gross rent✓ Correct
BMultiplying the monthly rent by 12 to get annual income
CDividing the annual NOI by the cap rate
DMultiplying the cap rate by the assessed value
Explanation
GRM = Sale Price ÷ Gross Rent (monthly or annual). It is a quick valuation tool that estimates value based on gross rental income without deducting expenses. It is less precise than cap rate analysis but useful for quick comparisons.
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