Property Valuation
What is the 'gross rent multiplier' (GRM) and how is it calculated?
AA. Annual NOI divided by property value
BB. Sales price divided by gross monthly or annual rent✓ Correct
CC. Monthly rent multiplied by the capitalization rate
DD. Net income divided by vacancy rate
Explanation
The Gross Rent Multiplier is calculated by dividing the property's sales price by its gross monthly (or annual) rent. GRM = Sales Price / Gross Rent. It's a quick valuation tool but doesn't account for expenses, so it's less precise than cap rate analysis.
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