What is Gross Income Multiplier?
The Gross Income Multiplier (GIM) is a real estate metric used to evaluate the value of income-producing properties. It is calculated by dividing the property's sale price or value by its gross annual rental income. The GIM provides a simple way to compare similar properties by considering their income potential relative to their market value. A lower GIM indicates a potentially better investment opportunity, as it suggests that the property is generating more income relative to its cost. However, it's essential to note that the GIM does not take into account operating expenses, vacancy rates, or other factors that can significantly impact the profitability of a property. Therefore, while GIM is a useful tool for initial property comparisons, it should be used in conjunction with other financial metrics for a comprehensive investment analysis.
How to Calculate Gross Income Multiplier?
Gross Income Multiplier calculator uses Gross Income Multiplier = Property Sale Price/Effective Gross Income to calculate the Gross Income Multiplier, The Gross Income Multiplier is a metric used in real estate to determine the value of a property based on its gross rental income. Gross Income Multiplier is denoted by GIM symbol.
How to calculate Gross Income Multiplier using this online calculator? To use this online calculator for Gross Income Multiplier, enter Property Sale Price (PSP) & Effective Gross Income (EGI) and hit the calculate button. Here is how the Gross Income Multiplier calculation can be explained with given input values -> 8 = 450000/27500.