Property Valuation
In the income approach, the Gross Rent Multiplier (GRM) is calculated by:
ADividing net operating income by cap rate
BDividing sales price by annual gross rent✓ Correct
CMultiplying monthly rent by 12
DDividing gross rent by vacancy rate
Explanation
The GRM equals the sales price divided by the annual gross rent (or monthly sales price / monthly rent for monthly GRM). It is a quick valuation tool for rental properties.
Related Michigan Property Valuation Questions
- In Michigan appraisal, 'market rent' differs from 'contract rent' because:
- Which of the following best defines 'market value' in Michigan appraisal?
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- In Michigan, an appraisal report that provides a brief presentation of the appraiser's findings is called a(n):
- In Michigan, which of the following would NOT be considered a comparable sale for appraisal purposes?
- In Michigan appraisal, 'effective age' of a building refers to:
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