Real Estate Math
A Washington duplex costs $390,000. Each unit rents for $1,600/month. What is the monthly GRM?
A111.5
B121.9✓ Correct
C148.4
D243.75
Explanation
Total monthly rent = 2 × $1,600 = $3,200. GRM = $390,000 ÷ $3,200 = 121.
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Key Terms to Know
Gross Rent Multiplier (GRM)
A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Math Concepts
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