Property Valuation
The gross rent multiplier for a comparable property that sold for $180,000 with a monthly rent of $1,500 is:
A100
B110
C120✓ Correct
D125
Explanation
GRM = Sale Price ÷ Monthly Rent = $180,000 ÷ $1,500 = 120. Using the values given ($180,000, $1,500), apply the appropriate formula..
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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.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
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.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Math Concepts
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