Real Estate Math
An Illinois property has a monthly gross rent of $2,800 and a gross rent multiplier (GRM) of 120. What is the estimated property value?
A$33,600
B$201,600
C$336,000✓ Correct
D$403,200
Explanation
Using the monthly GRM: Value = Monthly Rent × GRM = $2,800 × 120 = $336,000. The Gross Rent Multiplier is a quick valuation tool that relates a property's value to its gross rental income. A monthly GRM of 120 means the property is priced at 120 times its monthly rent. It is less precise than the income capitalization approach because it doesn't account for expense differences.
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