Gross Income Multiplier Solution

STEP 0: Pre-Calculation Summary
Formula Used
Gross Income Multiplier = Property Sale Price/Effective Gross Income
GIM = PSP/EGI
This formula uses 3 Variables
Variables Used
Gross Income Multiplier - Gross Income Multiplier is a metric used in real estate to determine the value of a property based on its gross rental income.
Property Sale Price - Property Sale Price refers to the amount of money exchanged between the buyer and seller in a real estate transaction.
Effective Gross Income - Effective Gross Income is the total income generated by a property after deducting vacancy and credit losses, providing a more accurate representation of its revenue.
STEP 1: Convert Input(s) to Base Unit
Property Sale Price: 450000 --> No Conversion Required
Effective Gross Income: 27500 --> No Conversion Required
STEP 2: Evaluate Formula
Substituting Input Values in Formula
GIM = PSP/EGI --> 450000/27500
Evaluating ... ...
GIM = 16.3636363636364
STEP 3: Convert Result to Output's Unit
16.3636363636364 --> No Conversion Required
FINAL ANSWER
16.3636363636364 16.36364 <-- Gross Income Multiplier
(Calculation completed in 00.004 seconds)

Credits

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Created by Keerthika Bathula
Indian Institute of Technology, Indian School of mines, Dhanbad (IIT ISM Dhanbad), Dhanbad
Keerthika Bathula has created this Calculator and 100+ more calculators!
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Verified by Vishnu K
BMS College of Engineering (BMSCE), Bangalore
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Mortgage and Real Estate Calculators

Effective Gross Income
​ LaTeX ​ Go Effective Gross Income = Potential Gross Rental Income+Other Income-Allowances for Vacancies and Bad Debts
Cost Approach Appraisal
​ LaTeX ​ Go Property Value = Reproduction Cost-Depreciation+Value of Land
Vacancy Rate
​ LaTeX ​ Go Vacancy Rate = (Vacant Units in the Building*100)/Total Units in the Building
Gross Income Multiplier
​ LaTeX ​ Go Gross Income Multiplier = Property Sale Price/Effective Gross Income

Gross Income Multiplier Formula

​LaTeX ​Go
Gross Income Multiplier = Property Sale Price/Effective Gross Income
GIM = PSP/EGI

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.

FAQ

What is 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 and is represented as GIM = PSP/EGI or Gross Income Multiplier = Property Sale Price/Effective Gross Income. Property Sale Price refers to the amount of money exchanged between the buyer and seller in a real estate transaction & Effective Gross Income is the total income generated by a property after deducting vacancy and credit losses, providing a more accurate representation of its revenue.
How to calculate 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 is calculated using Gross Income Multiplier = Property Sale Price/Effective Gross Income. To calculate Gross Income Multiplier, you need Property Sale Price (PSP) & Effective Gross Income (EGI). With our tool, you need to enter the respective value for Property Sale Price & Effective Gross Income and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.
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