Variables and units
Property Price
Purchase price or estimated price.
currency
Annual Gross Rental Income
Gross annual rental income.
currency
Real Estate · Valuation
Gross Rent Multiplier
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Use GRM for a quick first-pass comparison when detailed expense data is not available yet.
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Rent roll screening
Property PriceAnnual Gross Rental Income
A $900,000 price divided by $120,000 gross rent gives a 7.5 GRM.
Common mistakes
- Using NOI instead of gross rent.
- Comparing GRM across markets without context.
Step-by-step example
Rent roll screening
1. Start with the example inputs
- Property Price$900,000
- Annual Gross Rental Income$120,000
2. Apply the formula
Property PriceAnnual Gross Rental Income3. Run the numbers
7.5
A $900,000 price divided by $120,000 gross rent gives a 7.5 GRM.
What this result means
A GRM of 7.5 means the property costs that many years of gross rent at today's rent roll — lower generally means more rent for the price. It ignores expenses entirely, so use it as a first-pass screen between similar properties, then confirm with NOI-based measures like cap rate.