Property Valuation
The gross rent multiplier (GRM) is calculated as:
AAnnual gross rent divided by property value
BProperty value divided by monthly gross rent✓ Correct
CNet operating income divided by capitalization rate
DProperty value divided by annual operating expenses
Explanation
GRM = Sales Price ÷ Monthly Gross Rent. For example, if a property sells for $180,000 and collects $1,500/month in rent, the GRM = $180,000 ÷ $1,500 = 120. GRM is a quick valuation tool but does not account for expenses.
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