Gross Rent Multiplier Calculator

How the gross rent multiplier calculator works

The gross rent multiplier (GRM) compares a property's market value to its gross scheduled rental income. Investors use GRM as a quick screening tool before running deeper analysis with cap rate or cash-on-cash return. This calculator solves for GRM, market value, or annual gross income.

GRM ignores operating expenses and financing, so pair it with the capitalization rate calculator for net income yield, the operating expense ratio calculator to see how much gross income goes to expenses, or the cash-on-cash return calculator for levered cash flow analysis, or the rental property calculator for full cash flow, cap rate, and sale projections.

Gross rent multiplier formula

Gross scheduled income is total annual rent before vacancy, expenses, or debt service. A lower GRM generally suggests a property may be priced more attractively relative to rent, though market norms vary by location and property type.

Worked example: $400,000 property with $48,000 annual rent

1. Market value: $400,000
2. Gross scheduled income: $48,000 per year
3. GRM: $400,000 / $48,000 = 8.33

A GRM of 8.33 means the purchase price equals about 8.33 years of gross rent. If comparable properties in the area trade at a GRM of 10, this listing may warrant a closer look.

When to use GRM vs cap rate

GRM is fast and requires only gross rent, making it useful for comparing many listings quickly. Cap rate uses net operating income and accounts for operating expenses, giving a more accurate picture of property yield. Use GRM for initial screening, then refine with cap rate and cash flow projections before making an offer.

Frequently asked questions