Property Valuation
The gross rent multiplier (GRM) is calculated as:
AAnnual NOI ÷ Sale Price
BSale Price ÷ Gross Monthly Rent✓ Correct
CMonthly Rent × 12 ÷ Cap Rate
DNet Income ÷ Vacancy Rate
Explanation
GRM = Sale Price ÷ Gross Monthly Rent. For example, a property selling for $300,000 with gross monthly rent of $2,000 has a GRM of 150. It is used as a quick valuation tool for small residential income properties.
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