Real Estate Math
An Illinois property has gross rents of $144,000 and sells for $1,080,000. What is the gross rent multiplier (annual)?
A7.5✓ Correct
B8.5
C9.5
D7.0
Explanation
Annual GRM = Sale Price ÷ Annual Gross Rent = $1,080,000 ÷ $144,000 = 7.5. The GRM provides a quick way to compare properties based on their gross income—lower GRM means lower price relative to income (potentially better value), while higher GRM means higher price relative to income (lower yield). Market GRMs vary by property type, location, and market conditions.
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