Property Valuation
The gross rent multiplier (GRM) is calculated by dividing the:
ANet operating income by the cap rate
BSale price by the monthly gross rent✓ Correct
CAnnual gross rent by the operating expenses
DNet income by the vacancy rate
Explanation
The GRM = Sale Price ÷ Monthly Gross Rent. It is a quick, rough valuation tool used for residential income properties. For example, a property selling for $180,000 with monthly rent of $1,500 has a GRM of 120.
Related Georgia Property Valuation Questions
- The cost approach to value is most reliable for appraising:
- The income multiplier method uses which of the following to estimate value?
- In a seller's market, cap rates for investment properties tend to:
- Regression and progression are appraisal principles that affect value through:
- The overall capitalization rate (OAR) for an income property reflects:
- A Georgia appraiser is valuing a neighborhood convenience store. Which approach to value is most likely to be primary?
- External (economic) obsolescence differs from functional obsolescence in that it is:
- An appraisal done for a refinance is often based on the assumption that:
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