Gross Rent Multiplier Calculator

✖Property Value refers to the estimated monetary worth of a real estate asset or property at a given point in time.ⓘ Property Value [PV]			+10% -10%
✖Potential Gross Rental Income refers to the total revenue a property could generate if all units were rented at their maximum achievable rental rates, without factoring in collection losses.ⓘ Potential Gross Rental Income [GRI]			+10% -10%

✖Gross Rent Multiplier is a real estate metric used to estimate the value of a property based on its gross rental income relative to its sale price.ⓘ Gross Rent Multiplier [GRM]

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Formula

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Gross Rent Multiplier

Formula

`"GRM" = "PV"/"GRI"`

Example

`"17.99914"="418120"/"23230"`

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Gross Rent Multiplier Solution

STEP 0: Pre-Calculation Summary

Formula Used

Gross Rent Multiplier = Property Value/Potential Gross Rental Income
GRM = PV/GRI
This formula uses 3 Variables

Variables Used

Gross Rent Multiplier - Gross Rent Multiplier is a real estate metric used to estimate the value of a property based on its gross rental income relative to its sale price.
Property Value - Property Value refers to the estimated monetary worth of a real estate asset or property at a given point in time.
Potential Gross Rental Income - Potential Gross Rental Income refers to the total revenue a property could generate if all units were rented at their maximum achievable rental rates, without factoring in collection losses.

STEP 1: Convert Input(s) to Base Unit

Property Value: 418120 --> No Conversion Required
Potential Gross Rental Income: 23230 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

GRM = PV/GRI --> 418120/23230

Evaluating ... ...

GRM = 17.9991390443392

STEP 3: Convert Result to Output's Unit

17.9991390443392 --> No Conversion Required

FINAL ANSWER

17.9991390443392 ≈ 17.99914 <-- Gross Rent Multiplier

(Calculation completed in 00.004 seconds)

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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 50+ more calculators!

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BMS College of Engineering (BMSCE), Bangalore

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< 15 Important Formulas of Mortgage and Real Estate Calculators

Monthly Mortgage Payment

Go Monthly Payment = (Mortgage Amount*Interest Rate*(1+Interest Rate)^Compounding Periods)/((1+Interest Rate)^Compounding Periods-1)

Break Even Ratio

Go Break Even Ratio = (Debt Servicing Costs+Operating Expenses)/Gross Operating Income

Debt Service Coverage Ratio using ADS

Go Debt Service Coverage Ratio = Net Operating Income-Annual Debt Service

70 Percent Rule

Go Maximum Buying Price = (After Repair Value*0.7)-Estimated Repair Costs

Capitalisation Rate

Go Capitalisation Rate = (Net Operating Income/Current Market Value)*100

Gross Rent Multiplier

Go Gross Rent Multiplier = Property Value/Potential Gross Rental Income

Loan to Value Ratio

Go Loan to Value Ratio = (Mortgage Amount/Appraised Property Value)*100

Price per Square Foot

Go Price per Square Foot = Property Sale Price/Total Square Footage

Price to Rent Ratio

Go Price to Rent Ratio = Median Home Price/Median Annual Rent

Rental Yield

Go Rental Yield = (Annual Rental Income/Property Value)*100

Land to Building Ratio

Go Land to Building Ratio = Area of Land/Area of Building

Commission Value

Go Commission Value = Commission Rate*Final Sale Price

Floor Area Ratio

Go Floor Area Ratio = Gross Floor Area/Total Lot Size

Return on Equity

Go Return on Equity = Annual Return/Total Equity

Debt Ratio

Go Debt Ratio = Total Debt/Total Assets

Gross Rent Multiplier Formula

Gross Rent Multiplier = Property Value/Potential Gross Rental Income
GRM = PV/GRI

What is Gross Rent Multiplier ?

The Gross Rent Multiplier (GRM) is a real estate valuation metric used to estimate the value of an income-producing property. It is calculated by dividing the property's sale price by its gross rental income. The GRM provides investors with a quick and simple way to assess the potential value of a property based on its income generation. A lower GRM suggests that the property may be undervalued or has a higher income relative to its price, making it potentially more attractive as an investment. However, it's essential to note that the GRM does not consider operating expenses, vacancies, or other factors that can significantly impact the property's profitability, so it should be used alongside other financial metrics for a comprehensive analysis.

How to Calculate Gross Rent Multiplier?

Gross Rent Multiplier calculator uses Gross Rent Multiplier = Property Value/Potential Gross Rental Income to calculate the Gross Rent Multiplier, The Gross Rent Multiplier is a real estate metric used to estimate the value of a property based on its gross rental income relative to its sale price. Gross Rent Multiplier is denoted by GRM symbol.

How to calculate Gross Rent Multiplier using this online calculator? To use this online calculator for Gross Rent Multiplier, enter Property Value (PV) & Potential Gross Rental Income (GRI) and hit the calculate button. Here is how the Gross Rent Multiplier calculation can be explained with given input values -> 18.17913 = 418120/23230.

FAQ

What is Gross Rent Multiplier?

The Gross Rent Multiplier is a real estate metric used to estimate the value of a property based on its gross rental income relative to its sale price and is represented as GRM = PV/GRI or Gross Rent Multiplier = Property Value/Potential Gross Rental Income. Property Value refers to the estimated monetary worth of a real estate asset or property at a given point in time & Potential Gross Rental Income refers to the total revenue a property could generate if all units were rented at their maximum achievable rental rates, without factoring in collection losses.

How to calculate Gross Rent Multiplier?

The Gross Rent Multiplier is a real estate metric used to estimate the value of a property based on its gross rental income relative to its sale price is calculated using Gross Rent Multiplier = Property Value/Potential Gross Rental Income. To calculate Gross Rent Multiplier, you need Property Value (PV) & Potential Gross Rental Income (GRI). With our tool, you need to enter the respective value for Property Value & Potential Gross Rental 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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