Real Estate Math
A New York property owner receives an annual rental income of $72,000. The gross rent multiplier (GRM) for comparable properties in the area is 12. What is the estimated value of the property?
A$600,000
B$720,000
C$864,000✓ Correct
D$6,000
Explanation
Value = Annual Gross Rent x GRM = $72,000 x 12 = $864,000. The Gross Rent Multiplier is a quick valuation tool calculated by dividing a property's sale price by its annual gross rental income.
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