Property Valuation
Gross Rent Multiplier (GRM) is calculated by dividing the:
ANet operating income by the capitalization rate
BSale price by the annual gross rent✓ Correct
CMonthly rent by the property value
DProperty value by net income
Explanation
GRM = Sale Price ÷ Annual Gross Rent (or monthly GRM = Sale Price ÷ Monthly Rent). A GRM of 120 means the property sold for 120 times the monthly rent. It is a quick but less precise measure than a full income approach.
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