Property Valuation
In New York, the 'gross rent multiplier' (GRM) is calculated using which figures?
ANet Operating Income divided by annual gross rent
BSale price divided by annual gross rent (or purchase price divided by monthly rent for a monthly GRM)✓ Correct
CSale price divided by net operating income
DEffective gross income divided by the cap rate
Explanation
GRM = Sale Price / Annual Gross Rent (for an annual GRM) or Sale Price / Monthly Gross Rent (for a monthly GRM). It is a quick, simple valuation tool that does not account for vacancies or expenses — it uses gross rent only. Because it ignores expenses, it is a crude measure compared to the cap rate (which uses NOI).
Related New York Property Valuation Questions
- In New York, the 'principle of progression' means that:
- A New York appraiser who finds that three comparable sales indicate values of $480,000, $495,000, and $510,000 for a subject property would most likely conclude a final value of approximately:
- In New York, when appraising a luxury Manhattan condo, the appraiser will primarily use:
- The principle of progression in real estate valuation means:
- Which term describes land that cannot be created or expanded, making it a finite resource?
- Which factor is NOT one of the four elements of value (DUST)?
- A New York property has a net operating income of $120,000 and is capitalized at a 6% rate. Its indicated value using the income approach is:
- In New York, the 'principle of conformity' holds that:
Practice More New York Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free New York Quiz →