Property Valuation
The gross rent multiplier (GRM) is calculated as:
AAnnual gross rent divided by net operating income
BSale price divided by monthly or annual gross rent✓ Correct
CNet operating income divided by sale price
DSale price divided by net operating income
Explanation
The gross rent multiplier (GRM) = Sale Price ÷ Monthly (or Annual) Gross Rent. It is a quick tool for estimating the value of small income properties. A property that rents for $2,000/month with a GRM of 150 would be worth approximately $300,000 ($2,000 × 150).
Related Rhode Island Property Valuation Questions
- A Rhode Island assessor values property for property tax purposes. Assessed value in Rhode Island is typically:
- A property listed for $375,000 receives an appraisal of $355,000. The most likely outcome is:
- What is a 'comparable sale' (comp) in Rhode Island real estate appraisal?
- What is a 'market value' opinion in a Rhode Island appraisal?
- Depreciation in appraisal is defined as:
- The 'arm's length transaction' assumption in appraisal means that:
- In Rhode Island appraisal, what is 'paired sales analysis'?
- In Rhode Island, the 'effective age' of a building used in appraisal refers to:
Practice More Rhode Island Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Rhode Island Quiz →