Real Estate Math
A Pennsylvania property has a GRM of 12 and generates $24,000 in annual gross rent. What is the estimated market value?
A$2,000
B$288,000✓ Correct
C$240,000
D$200,000
Explanation
Gross Rent Multiplier (GRM) method: Value = Annual Gross Rent × GRM = $24,000 × 12 = $288,000. The GRM method is a quick income-approach estimate, dividing comparable sale prices by their annual gross rents to derive a market-based multiplier, then applying it to the subject's rent. It's simpler than full income capitalization but less precise.
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