Real Estate Math
A Michigan property has total annual rental income of $36,000 and a GRM of 100 (annual). What is the estimated market value?
A$3,600,000
B$360,000✓ Correct
C$3,600
D$3,200,000
Explanation
Value = Annual GRM x Annual Gross Rent = 100 x $36,000 = $3,600,000. But if GRM of 100 is applied to monthly rent: monthly rent = $3,000; value = 100 x $3,000 x 12 = $3,600,000.
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