Real Estate Math
A duplex sells for $180,000. Each unit rents for $800/month. What is the GRM?
A100
B112.5✓ Correct
C120
D90
Explanation
Gross monthly rent = $800 × 2 units = $1,600. GRM = $180,000 ÷ $1,600 = 112.
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Key Terms to Know
Gross Rent Multiplier (GRM)
A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Math Concepts
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