Property Valuation
The gross rent multiplier (GRM) is calculated as:
ANet operating income divided by cap rate
BSale price divided by gross monthly rent✓ Correct
CAnnual income divided by expenses
DAppraised value divided by net income
Explanation
GRM = Sale price ÷ Gross monthly rent. If a property sells for $240,000 and rents for $2,000/month, GRM = $240,000 ÷ $2,000 = 120. GRM is a quick valuation tool for small income properties.
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