Real Estate Math

A property has an annual gross rent of $48,000 and a gross rent multiplier (GRM) of 12. What is the estimated value of the property?

A$480,000

B$576,000✓ Correct

C$400,000

D$600,000

Explanation

Property Value = GRM × Annual Gross Rent = 12 × $48,000 = $576,000. The GRM is a quick valuation tool for income properties that divides the sale price by the gross annual (or monthly) rent to derive a multiplier, then applies it to the subject property.

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