Property Valuation
What is 'gross rent multiplier' (GRM) analysis and when is it used in Illinois appraisal?
AA detailed income analysis used for all commercial properties
BA quick valuation method relating a property's price to its gross rental income; used as a rough check or for residential income properties✓ Correct
CAn appraisal technique required by Illinois law for properties over $1 million
DA method that uses net income rather than gross income
Explanation
The GRM is a simple valuation tool calculated by dividing the sale price by the gross rental income (monthly or annual). It is used as a quick sanity check or for smaller residential income properties (like 2-4 unit buildings) where a full income capitalization analysis may not be warranted.
Related Illinois Property Valuation Questions
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- An appraiser who uses the cost approach for a 50-year-old building must account for which three types of depreciation?
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